Skip to main content

IAA to Senate Banking: Focus on Proxy System Weaknesses, Not Proxy Advisory Firms

December 6, 2018

IAA Vice President, Communications & Marketing Herb Perone.

Washington, D.C. (December 6, 2018) – One day of its hearing on the proxy process and rules, the Investment Adviser Association (IAA) has told the Senate Banking Committee the proxy process is broken and in need of urgent attention. The IAA urged senators to use the hearing to spotlight weaknesses in the proxy system infrastructure, and not proxy advisory firms.

“Investors and those voting on behalf of investors should be able to rely on the integrity of the proxy process,” IAA President & CEO Karen Barr said in a letter to the committee. “We strongly believe that it will be a missed opportunity if the committee instead focuses on issues such as the politically heated, but far less systemically important, subject of proxy advisory firms.”

To the extent that the Senate Banking Committee hearing does focus on proxy advisory firms, Barr’s letter said, “We strongly object to efforts to restrict advisers’ use of these firms and to regulation that would make these firms’ services more expensive for advisers and their clients and increase barriers to entry.” IAA members routinely vote proxies on behalf of and in the best interest of their clients and necessarily rely on the various services that proxy advisory firms provide, particularly voting mechanics, data aggregation and workflow management.

“These administrative services are critically important for advisers that manage hundreds, if not thousands, of proxy votes each year,” Barr said in her letter to the committee. “Indeed, investment advisers would face extreme difficulty if they were unable to use these services, especially those that relate to the administration of proxy voting.”

“We believe that the issues regarding proxy advisory firms do not compare to the challenges related to proxy infrastructure,” Barr said. “The SEC and the committee should instead focus on how to improve and modernize that system to ensure effective shareholder engagement.”

The IAA’s letter to the Senate Banking Committee is available here.


About the Investment Adviser Association

The Investment Adviser Association (IAA) is the leading trade association representing the interests of SEC-registered investment adviser firms. The IAA’s more than 650 member firms collectively manage assets in excess of $25 trillion for a wide variety of institutional and individual investors. For more information, visit or follow us on LinkedIn, Twitter and YouTube.

You are now leaving Investment Adviser Association

The IAA provides links to web sites of other organizations in order to provide visitors with certain information. A link does not constitute an endorsement of content, viewpoint, policies, products or services of that web site. Once you link to another web site not maintained by the IAA, you are subject to the terms and conditions of that web site, including but not limited to its privacy policy.

You will be redirected to

Click the link above to continue or CANCEL