LGT Wealth Management Puts “Pass-Through Voting” Power In Clients’ Hands

In what the firm says is a ground-breaking move in Europe, it has embraced an important new tool in investors’ stewardship toolkits.

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LGT
Wealth Management, the UK arm of Liechtenstein’s LGT, yesterday said it has become
the first wealth manager in Europe to adopt “pass-through
voting,” giving fund investors a direct say in the firms
they invest in.

The firm will use a service in collaboration with Legal &
General, State Street Global Advisors, and fintech Tumelo, via
Tumelo’s ProxySphere technology, the wealth manager, which
oversees about £30.4 billion ($38.5 billion) in assets,
said. 

LGT Wealth Management said the change allows it to reflect client
views on stewardship within a range of passive pooled-fund
investments in client portfolios. 

“We believe pass-through voting is rapidly becoming a key
mechanism in investors’ stewardship toolkits and an effective way
to complement our engagement efforts with managers,” Siobhan
Archer, global stewardship lead at LGT Wealth Management,
said. 

Traditionally, stewardship and proxy voting have operated through
a centralised approach, where asset managers made voting and
engagement decisions on behalf of all clients based on
standardised policies. The growth of passive investing means that
a small number of large asset managers have accumulated
significant voting power over public companies, LGT said. This
change also recognises a broader trend in the UK with regulators
urging trustees and wealth managers to take greater ownership of
stewardship practices, rather than delegating responsibilities to
asset managers.

Edd Micklem, VP of investor partnerships at Tumelo, added: “We’ve
already seen UK pension funds adopt pass-through voting via our
partnership with LGIM. It’s exciting to see asset managers also
collaborating with their wealth clients in this way. Wealth
managers are paying much closer attention to the degree of voting
alignment within their portfolios, particularly on environmental
and social issues, so we are thrilled to enable them to take
action.”