Bank of America’s Merrill Lynch unit plans to end its reliance on external proxy advisory firms from 2027, reflecting a broader shift among major US banks towards managing shareholder voting decisions internally. According to a document released on Friday, the brokerage will introduce changes to its proxy voting framework, including ending clients’ ability to delegate voting authority to Institutional Shareholder Services (ISS).
Changes to Merrill’s Proxy Voting Framework
Under the revised arrangement, Merrill Lynch clients will no longer have the option to delegate their proxy voting authority to ISS starting January. The brokerage will instead take responsibility for voting on behalf of clients who have previously delegated this authority to ISS, unless they choose to opt out of the transition by December 15.
The move signals a change in how the financial services unit intends to manage shareholder voting, bringing the process under its own oversight rather than relying on external recommendations.
Proxy advisory firms typically assess shareholder proposals, corporate governance practices and board-related matters. They provide voting recommendations to institutional investors ahead of annual shareholder meetings, helping them make decisions on corporate resolutions and director appointments.
Growing Scrutiny of Proxy Advisory Firms
Proxy advisers and major asset managers have faced criticism for several years from conservative groups and some business leaders. Critics Merrill Lynch argue that these firms sometimes recommend votes against corporate board decisions or directors and place disproportionate emphasis on environmental, social and climate-related issues.
The industry has also come under increased regulatory scrutiny. In December 2025, US President Donald Trump signed an executive order seeking stronger oversight of proxy advisory firms, arguing that leading providers sometimes promote politically motivated agendas.
Major Banks Reconsider External Voting Advice
Merrill Lynch’s decision follows similar steps by other major financial institutions. JPMorgan Chase’s asset management division moved earlier this year to reduce its reliance on US proxy advisory firms, a development Reuters described as an industry first.
The growing trend suggests that large financial institutions are reassessing the role of external advisers in shareholder voting and corporate governance decisions.
By bringing proxy voting responsibilities in-house, major banks are seeking greater direct control over how shareholder interests are represented, amid continuing debate over corporate governance, sustainability priorities and the influence of advisory firms on US businesses.
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