Four features of our pass-through product that will excite fund managers
Pass-through voting has many benefits for a fund manager. It can help attract clients with diverse, even conflicting stewardship views, reduce the risk of divestment, improve alignment with investors, and add more flexibility to a fund product.
An effective pass-through voting product must have features that deliver these benefits — and mitigate any risks — in the best possible way. So Tumelo has been 100% focused on creating a pass-through voting product that does just that.
Here are just four features that we feel make our product an ideal pass-through voting solution for fund managers.
1. "Beneficial-owner-first" approach to investor verification
Figuring out how much of a fund an investor owns is not a straightforward endeavour as fund managers don’t hold all the data needed. Instead, understanding the true vote entitlement for an investor requires data from custodians, fund administrators and sometimes transfer agents or investment platforms. Although feasible, this complex web poses a clear barrier for fund managers looking to implement pass-through voting themselves.
Tumelo does the heavy lifting for the fund manager. We work directly with custodians, fund administrators and investors to simplify this process, collecting the data and calculating the vote entitlement so we can issue ballots accurately. This has several advantages. Firstly, it saves fund managers implementation effort, allowing them to focus their roadmap on other things.
Secondly, this approach to pass-through voting allows you to reach all investors, as a vote can be applied across all funds and investor types within the constraints of regulation. This means that retail investors can also receive the pass-through voting service, allowing you to treat all unit holders fairly.
2. Flexible voting options
Each client may want to act on their right to vote in a different way. Some may pick a vote policy and simply let it be, happy with the voting strategy it implements. Others may want to take significantly more control, deciding on votes on a case-by-case basis and voting their asset manually.
Many are likely to land somewhere in the middle: letting the vote policy vote on their behalf for many routine proposals, but for votes deemed significant by either their asset manager or proxy advisor, examine the situation themselves and make an independent decision.
Tumelo's platform caters for all three possibilities, and has the largest range of pre-approved voting policies for your investors to choose from — we have partnered with Glass Lewis & Co, As You Sow, and PIRC to provide investors the greatest flexibility when it comes to picking a policy that suits their stewardship needs.
You can also provide your own custom policy, or they can provide their own for you to pre-approve. We welcome any and all vote policies into our product, giving investors the greatest flexibility and freedom of choice when it comes to stewardship matters.
3. Share your vote rationale
One of the main benefits of pass-through voting is the information it can give you on your investors' preferences. But with Tumelo's product, this communication can become a two-way street. Our "vote rationale" feature lets you present your voting decision and justification to your investors.
This gives you an opportunity to bring your client into the stewardship process and demonstrate your expertise on proxy-voting matters, adding value to your service and saving you time at client meetings; with your rationale already explained, you will have more time to focus your discussion on important issues.
Maintain control through vote override function
Pass-through voting is a fantastic way for asset owners to become more involved in the stewardship process and engage with their assets. However, it does not renege a fund manager of their fiduciary duty. To allow the fund manager to maintain control on crucial fiduciary matters, our pass-through voting platform has an "override" feature, which enables them to override a vote cast by a client.
In these instances, the vote rationale feature is especially useful. You can actively inform your client as to why you have decided to act against their vote, turning a moment of potential conflict into an opportunity for you to demonstrate your dedication to your client's outcomes.
Want to know more?
These are just some of the features included in our pass-through voting product - we can also talk for days about the ease of its integration, the user experience, and a plethora of other features that deliver valuable benefits for fund managers looking to stay competitive.
Written by Philip Cottis, Strategic Projects Lead at Tumelo.