JPMorgan Chase’s asset-management arm is severing all relationships with proxy advisory firms with immediate effect, escalating pressure on an industry that has recently come under scrutiny from the Trump administration.
The unit, one of the world’s largest investment managers with more than $7 trillion in client assets, will begin using an internal artificial-intelligence platform known as Proxy IQ to support voting on US company resolutions during the upcoming proxy season, according to an internal memo.
The platform will manage shareholder votes and analyse data from more than 3,000 annual general meetings, generating recommendations for portfolio managers. This will replace the traditional role played by external proxy advisers, the memo said.
JPMorgan believes it is the first major investment firm to completely stop using third-party proxy advisers. The bank had previously announced it would no longer rely on advisers for voting recommendations, instead turning to its in-house stewardship team.
Proxy advisers such as Glass Lewis and Institutional Shareholder Services (ISS) provide research, voting guidance and infrastructure to investment firms required to cast votes at thousands of shareholder meetings each year.
Their influence has long been criticised by corporate executives and other stakeholders, who argue that proxy advisers wield disproportionate power and operate business models that may involve conflicts of interest. In December, an executive order issued by the Trump administration called on securities and antitrust regulators to examine the sector.
Jamie Dimon, JPMorgan’s chief executive, has been among the most vocal critics, describing proxy advisers last year as “incompetent” and saying they “should be gone”.
ISS and Glass Lewis effectively operate as a duopoly in advising institutional investors on corporate-governance matters. While large asset managers typically maintain internal teams to assess voting decisions, smaller firms often depend more heavily on external advisory services.
Responding to last month’s executive order, ISS said it does not set corporate-governance standards and that its institutional clients make their own decisions. Glass Lewis has separately announced it will discontinue its widely distributed “benchmark” voting recommendations from 2027, shifting its focus towards more tailored advice for individual clients.
