🧠 Food for thought

Implications, context, and why it matters.

AI in proxy voting is allowed under fiduciary standards, with practical limits

• Daly said investment advisers can use AI for proxy voting (shareholder ballots on corporate matters), and this is not new policy 1. It falls under rules that require advisers to act in clients’ best interests.
• SEC guidance from 2019 set how to use third-party advisory firms 1. Registered Investment Advisers (RIAs) evaluate the firm’s skill, check data accuracy, and keep oversight.
• AI tools face the same scrutiny as humans. Advisers run due diligence on methodology, accuracy, and conflicts, which can limit automated decisions.
• Human oversight stays in place because advisers remain legally responsible for voting decisions 1. They must keep books and records that support each vote, including materials reviewed and client requests or responses, whether they use AI or human proxy advisors (firms that analyze shareholder ballots and recommend how to vote).

Vendors can build AI proxy tools for adviser compliance

• Vendors in fintech or AI can build human-in-the-loop proxy analysis platforms that help advisers meet due diligence needs and save time.
• Tools can automate data gathering and early analysis. They still require human review and approval before a vote, which keeps oversight in place.
• Advisers review proxy voting policies each year and keep required records on votes and due diligence 1. That ongoing work creates demand for compliance workflow automation.
• Strong products cast AI as an analytical assistant that helps advisers judge if a proxy vote is worth the cost and material for clients 1.