Wells Fargo has rolled out a proprietary proxy voting system within its Wealth & Investment Management (WIM) business, marking a strategic shift away from reliance on external proxy advisory firms. The move applies to client assets where the firm holds both investment discretion and voting authority and is intended to give Wells Fargo greater control over how shareholder votes are cast.

Building an Internal Voting Framework

Under the new model, Wells Fargo will manage proxy voting internally using its own custom policies and voting instructions. The firmationale, according to the firm, is to ensure that voting decisions are aligned with clients’ long-term economic interests while reducing dependence on third-party advisors. The in-house approach is framed as a way to increase independence and accountability in a process that has become increasingly politicized in the United States.

Darrell Cronk, Chief Investment Officer of Wells Fargo WIM, said the new system allows the firm to take more direct responsibility for proxy voting and reflects a broader effort to modernize client services through internal capabilities rather than outsourced decision-making.

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A Shifting Landscape for Proxy Advisors

The proxy advisory market has long been dominated by two firms, Institutional Shareholder Services and Glass Lewis, which together account for the vast majority of voting recommendations used by asset managers. In recent years, these firms have faced mounting scrutiny from U.S. politicians critical of ESG and diversity-related shareholder proposals.

That pressure intensified following executive actions and investigations initiated during President Donald Trump’s current term, with federal agencies directed to examine whether proxy advisors have engaged in anti-competitive practices or promoted politically motivated agendas. SEC Chair Paul Atkins has also signaled closer examination of the influence of proxy advisors on shareholder voting outcomes.

Part of a Broader Industry Trend

Wells Fargo’s decision follows a similar announcement earlier this month by JPMorgan Chase, which said its asset management arm would stop using third-party proxy advisors for U.S. company votes and instead deploy an internal, AI-enabled voting platform. Together, the moves suggest a broader reassessment among large U.S. asset managers of the role external advisors play in governance decisions.

According to reporting citing sources familiar with the matter, Wells Fargo has also ended its relationship with ISS, further underscoring the scale of its shift toward internalization.

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Technology and Operational Support

To support the new voting framework, Wells Fargo has expanded its relationship with Broadridge. Broadridge’s technology platform will be used to administer the proprietary voting service and handle vote processing, while decision-making authority remains with Wells Fargo’s internal teams.

Implications for Governance and ESG

For corporate governance observers, the move highlights a growing tension between asset managers’ desire for independence and the regulatory and political scrutiny surrounding ESG-related voting. While internal systems may reduce exposure to external controversy, they also place greater responsibility on firms to demonstrate that voting policies are transparent, consistent, and aligned with fiduciary duties.

As more large managers reconsider their proxy voting infrastructure, the influence of traditional proxy advisory firms may diminish, reshaping how shareholder governance decisions are made in U.S. capital markets.

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