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BofA's Merrill Lynch to end use of proxy advisers starting 2027

By Reuters News

Oct 30 (Reuters) - Bank of America's BAC.N Merrill Lynch unit no longer plans to use proxy advisers starting 2027, according to a document on Friday, as US big banks move to handle shareholder voting internally.

Proxy advisers and large fund managers have for years attracted criticism from conservatives and some business leaders, who argue such firms often recommend votes against boardroom decisions or directors and place too much emphasis on climate and social issues.

Here are some other details:

  • Under the revamped proxy voting framework, Merrill's clients will not have the option to delegate proxy voting authority to proxy firm Institutional Shareholder Services (ISS) starting January.

  • Merrill will assume and accept proxy voting authority for clients who had delegated it to ISS and do not opt out of the transition by December 15.

  • Proxy advisory firms review shareholder proposals and corporate governance issues and provide voting recommendations to institutional investors ahead of annual shareholder meetings.

  • JPMorgan Chase's JPM.N asset management division earlier this year moved to cut ties with proxy advisers in the US, Reuters reported, a move the bank had described as an industry first.

  • In 2025, US President Donald Trump signed an executive order aimed at increasing oversight of the proxy advisory industry on grounds that top firms often "advance and prioritize radical politically-motivated agendas."

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