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

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.”