Interactive Investor

Pass-through voting: a game changer for shareholder democracy?

8th February 2023 12:53

Jemma Jackson from interactive investor

interactive investor comments on today's white paper from Tumelo.

Today’s white paper from Tumelo makes the case for shareholder democracy with pass-through voting, where investors in a pooled open-ended fund (or ETF) can vote the shares in proportion to the AUM they have invested.

Commenting, Richard Wilson, CEO, interactive investor, says: “At a time when private investor wealth is increasingly concentrated among a small number of asset managers, the issue of stewardship and share of voice is an important global issue.

“Pressure is building, which we welcome. And with the investment platform industry a key part of the solution, some platforms will be feeling this pressure more than others. There is still a mountain to climb if we are to win hearts and minds and convince the majority of private investors than their votes count. Some investment platforms are starting at a lower base than others even when it comes to facilitating voting in listed companies, let alone funds.

“We saw a 30% increase in the number of votes processed on our platform last year, but it was hard-won and we continue to lobby regulators and UK PLC to enshrine ‘plain English’ in their shareholder communications so private investors are not disenfranchised by legal jargon.

“Given the long road ahead we know we have, these very welcome proposals from Tumelo will require patience, if they come to pass. The issue of pass-through voting is technical, and will need to be backed up by a broader educational campaign, enshrined in plain English.”

Lee Wild, Head of Equity Strategy, interactive investor, says: “Having a say in how a business is run is one of the great benefits of share ownership. Whether it’s in support of strategy, or to protest at policy or specific issues, every shareholder gets a vote. So it’s entirely logical that those same rights should be extended to investors who own stakes in companies indirectly through funds, rather than entrust fund managers to act on our behalf. This should ensure a more representative outcome, but only if shareholders use their vote. More investors than ever are taking an active interest in the companies they own and proving time and again that their participation can make a big difference. Of course, making it happen requires work, and there are hurdles to overcome, but pass-through voting could be a game changer for shareholder-boardroom relations.”

interactive investor on voting

interactive investor, the UK’s second-largest investment platform for private investors, has led on raising awareness of the importance of retail investor votes at AGMs.

The platform made its online voting service opt out rather than opt in in November 2021, which led to a 30% jump in the number of votes processed on ii last year from 162,673 in 2021 to 210,801 in 2022.

But the picture is nuanced. The percentage of votes used in 2022 fell to 8%, compared to 14% in 2021. This is likely because, having enrolled the wider customer base, the ability to vote on interactive investor is no longer the preserve of those with a more natural inclination to do so.

interactive investor publishes regular editorial for customers on the big upcoming AGMs, and continues to engage with policymakers on the importance of ‘plain English’ in shareholder communications, making it easier for investors to engage with the key issues on the table.

interactive investor on stewardship

The influence of asset managers on the global AGM stage – the subject of today’s Tumelo report - is also not lost on interactive investor.

In ii’s response to the FCA’s discussion paper: Sustainability Disclosure Requirements (SDR) and investment labels (CP 20/22), which closed last month, ii argued that fund houses could disclose what they facilitate in the way of voting, or to publish their voting records.

Number of votes processed from 2019 – to 2022


Number of votes processed

Percentage of votes used

















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