Bank of America's Merrill brokerage is planning to take over the proxy voting process for its clients, starting in 2027. Under the new arrangement, Merrill will no longer rely on outside firms like Institutional Shareholder Services (ISS) to cast votes on behalf of investors. Instead, it will handle the voting itself—unless clients choose to opt out by December 15.
Proxy voting is the process by which shareholders cast votes on important company matters, such as electing board members, approving executive pay, or weighing in on shareholder proposals. For most individual investors, these votes are cast automatically by their brokerage, often based on recommendations from proxy advisory firms like ISS and Glass Lewis.
Why proxy advisers have become controversial
Proxy advisers have long played a behind-the-scenes role in corporate governance. They analyze company filings, meet with management, and publish voting recommendations ahead of annual meetings. Many institutional investors—like mutual funds and pension funds—rely on these recommendations to decide how to vote on hundreds of ballots each year.
But these firms have become a political and corporate flashpoint. Critics argue that their guidance can sway votes against directors, sometimes based on rigid policies rather than company-specific circumstances. Others say the advisers place too much emphasis on climate and social issues, pushing an agenda that some shareholders may not share. Supporters counter that proxy advisers provide valuable independent analysis and help hold management accountable.
The debate has drawn attention from regulators and lawmakers, with some pushing for more transparency and oversight of the industry. Merrill's decision to bring voting in-house is a notable shift, as it signals that a major brokerage sees value in controlling the process directly rather than outsourcing it.
What this means for Merrill clients
For everyday investors with accounts at Merrill, the change means their votes will be cast by Merrill's own team starting in 2027, unless they take action. Clients who prefer to keep using ISS or who want to make their own voting decisions can opt out by December 15. The opt-out deadline is important—if you do nothing, Merrill will assume you're fine with the new arrangement.
This is part of a broader trend in the financial industry, where firms are rethinking how they handle shareholder voting. Some brokerages have already moved to give clients more control, offering tools to vote directly or to choose their own proxy adviser. Merrill's move could prompt other firms to follow suit, especially as the political debate over proxy advisers continues.
What it means for investors
For most investors, proxy voting is a low-priority task. Many people never vote their shares at all, and the default is often to go along with management or with the proxy adviser's recommendation. Merrill's change may not have a huge impact on your portfolio's performance, but it does affect how your voice is heard as a shareholder.
If you have strong views on corporate governance, climate policy, or social issues, you may want to pay attention to how your votes are being cast. The opt-out window gives you a chance to decide whether you want Merrill to vote on your behalf or whether you'd rather keep the current system.
It's also worth noting that this move comes at a time when the Federal Reserve's rate decisions and other macroeconomic factors are dominating market headlines. But corporate governance issues like proxy voting can still matter for long-term investors, especially when it comes to board composition and executive pay.
For those who prefer to stay hands-off, the change is unlikely to be disruptive. Merrill will handle the voting process, and you'll still receive the same disclosures and reports. But if you want to retain control over how your shares are voted, the December 15 deadline is the key date to remember.
As the financial industry evolves, companies are making big strategic moves in response to changing market conditions. Merrill's decision to bring proxy voting in-house is another example of how firms are adapting to new pressures—whether from regulators, clients, or the broader political climate.
Ultimately, the change gives investors more transparency and control, but it also requires them to be proactive if they want to exercise that control. The opt-out window is your chance to decide what works best for you.
