#624
Insourcing the Outsourcers

Proxy voting is one of those things everyone agrees is important, right up until it becomes their problem. Own a diversified portfolio and you are suddenly on the hook to vote on hundreds of proposals a year across hundreds of companies, from director elections to nonbinding ESG items to the occasional deal. In theory it is corporate democracy. In practice it is a pile of PDFs and a calendar reminder you ignore.

That mismatch is why proxy advisers like ISS and Glass Lewis became the default layer for institutional investors. They read the materials, standardize the workflow, and produce recommendations that often function like the market’s autopilot. Which is why JPMorgan’s move matters. In an industry first, its asset-management arm is cutting all ties with proxy advisers for U.S. votes, effective immediately, and replacing them with an internal AI platform called Proxy IQ. The pitch is straightforward: digest annual meeting materials, manage the vote mechanics, and generate recommendations at scale, including analysis across more than 3,000 annual company meetings.

The timing is not subtle. Proxy advisers are facing intensifying political and regulatory scrutiny, including a recent White House executive order aimed at curbing their influence. Jamie Dimon has also been critical of the category for years, publicly calling them “incompetent” and arguing these firms wield too much power and get too much wrong.

The takeaway is simple: as AI gets better, “outsourced” becomes optional. When AI gets accurate enough, it pulls work back in-house, especially the kind that is repetitive, compliance-heavy, and hard to justify paying a third party to repackage. Proxy voting is just a visible first step. The bigger question is what other outsourced systems, advisory layers, and legacy workflows get quietly replaced as AI matures.