According to The Wall Street Journal, JPMorgan Chase’s asset-management unit, which oversees more than $7 trillion in client assets, is immediately cutting all ties with external proxy advisory firms. The unit will instead use an internal, artificial-intelligence-powered platform it’s calling Proxy IQ to assist with voting shares in thousands of U.S. companies this coming proxy season. The AI will analyze data from over 3,000 annual company meetings and provide recommendations to portfolio managers. The bank believes it’s the first large investment firm to completely stop using these outside advisers, like Glass Lewis and Institutional Shareholder Services (ISS). This move follows years of criticism from JPMorgan CEO Jamie Dimon, who has called proxy advisers “incompetent,” and comes after a December executive order from the Trump administration calling for regulators to probe the industry.
JPMorgan’s Big Bet
This is a huge deal. Basically, JPMorgan is saying its own tech and stewardship team are now better than the entire specialized industry that’s built up around proxy voting. They’re betting that their AI, fed with data from thousands of meetings, can make smarter, more tailored recommendations than the one-size-fits-all reports from ISS or Glass Lewis. And look, they have the scale to try it—with $7 trillion to manage, they can afford to build this system. But here’s the thing: it’s also a massive power play. By internalizing this function, JPMorgan completely controls the narrative on how it votes its shares. No more external scrutiny or potential conflicts from the advisers’ business models. It’s a declaration of independence, wrapped in a tech upgrade.
The Proxy Adviser Squeeze
So what does this mean for Glass Lewis and ISS? In the short term, losing one client, even a giant like JPMorgan, won’t break their duopoly. Most asset managers, especially smaller ones, still desperately need their plumbing and research. But the long-term threat is real. JPMorgan is setting a precedent. If other mega-managers like BlackRock or Vanguard follow suit, the proxy advisers’ core business model is in serious trouble. They’re already under political pressure and criticism about their influence. Now they face technological disruption from their own clients. Glass Lewis’s recent move to phase out its broad “benchmark” recommendations by 2027 is a direct response to this pressure—pivoting to more customized advice before their clients build custom systems themselves.
A New Era of Governance?
The bigger question is whether this leads to better or worse corporate governance. Critics, including Dimon, say the proxy advisers wield too much power with simplistic, checkbox-style recommendations. An AI system could, in theory, perform a more nuanced analysis. But could it also just become a tool to rubber-stamp management-friendly votes? Without the external, standardized framework, will voting become less transparent? JPMorgan’s experiment is now the test case. If their AI platform proves effective, it could spark a wave of similar in-house systems across finance. If it stumbles, it’ll be a very expensive lesson. Either way, the era of blindly outsourcing these critical governance decisions is ending. The industry’s plumbing is getting a major, AI-driven overhaul.
