JPMorgan is abandoning proxy advisors and relying on AI to make decisions on shareholder votes in the United States

JPMorgan Replaces Proxy Advisors with AI for Shareholder Voting

• JPMorgan's asset and wealth management arm will no longer use external proxy advisors for shareholder voting in the United States.
• Instead, the bank is introducing an internally developed artificial intelligence system.
• The new platform, named Proxy IQ, will manage every stage of the voting process, as detailed in an internal communication.

JPMorgan's asset and wealth management division is ending its reliance on outside proxy advisory firms for guidance on shareholder voting, a practice it has followed for years.

According to an internal memo reviewed by Business Insider, the bank claims to be "the first major investment firm to completely remove any dependence on external proxy advisors for our U.S. voting process."

A spokesperson for JPMorgan Asset Management told Business Insider that these changes to the U.S. proxy voting system will be fully implemented on April 1, after a transition period during the first quarter.

The Wall Street Journal was the first to report this development.

With $7 trillion in client assets, JPMorgan's asset management division participates in thousands of shareholder votes, which often address governance issues beyond financial matters. Within the industry, it is standard to consult proxy advisory firms for data, analysis, and voting recommendations.

This practice has faced criticism from the Trump administration, which issued an executive order in December calling for stricter oversight of the proxy advisory sector.

The executive order stated, "Proxy advisors regularly use their considerable influence to promote and prioritize extreme, politically driven agendas."

JPMorgan emphasized in its memo that moving away from proxy advisory firms demonstrates its "steadfast dedication to voting exclusively in the best interests of our clients, leveraging our own informational strengths."

To replace external advisors, the asset and wealth management group is rolling out Proxy IQ, an AI-powered platform designed to assist with shareholder voting decisions, according to the memo.

JPMorgan explained, "Proxy IQ upholds the rigorous independent analysis that our portfolio managers, research analysts, and stewardship teams have always applied to each vote, utilizing our internal expertise to oversee every facet of the voting process, from data gathering to research selection, down to the finest details."

The AI tool will be able to collect and interpret proprietary data from over 3,000 annual company meetings, the memo noted.

JPMorgan has allocated $18 billion for technology investments, and CEO Jamie Dimon has previously stated his intention to lead in the AI innovation race.

Industry Response

Institutional Shareholder Services (ISS) and Glass Lewis, two proxy advisory companies previously engaged by JPMorgan and mentioned in the Trump administration's executive order, did not respond to Business Insider's request for comment.