LGT Wealth Management has announced it has become the first wealth manager in Europe to adopt pass-through voting technology.

The firm will use a service in collaboration with Legal & General, State Street Global Advisors, and Tumelo, via Tumelo’s ProxySphere technology, to implement the voting approach.

Pass-through voting, which LGT Wealth Management adopted last month, enables fund investors to have direct input in the decisions affecting the companies they invest in.

LGT Wealth Management stated that while stewardship and proxy voting had traditionally operated through a centralised approach, the growth of passive investing meant a “small number of large asset managers” had accumulated “significant voting power” over public companies.

Furthermore, it said the change was in keeping with the broader trend of regulators in the UK urging trustees and wealth managers to take greater ownership of stewardship practices.

Pass-through voting will allow LGT Wealth Management to reflect clients’ views within a range of passive pooled-fund investments in client portfolios.

“This is an important move for us,” commented LGT Wealth Management global stewardship lead, Siobhan Archer.

“By adopting pass-through voting, we can better uphold our commitment to enhancing and preserving assets for our clients while creating long-term value for the economy, environment, and society.

“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.”

Tumelo VP of investor partnerships, Edd Micklem, stated: “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.”

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