Stewardship of money in workplace pensions – my jaundiced-eye view!

Having read 179 pages of FCA consultation, my head’s a little clearer on how we can make our money matter. Firstly we can invest in things that in themselves improve life on the planet and secondly we can invest through agents who accelerate the process through external stewardship. We of course can be agents of change and if we own shares we can exercise our voting rights. But most of us rely on others to do this for us, that’s because our money isn’t directly invested but invested via a trust and/or a fund or via a contract with an insurer which amounts to the same thing.

Next week, I’m going to an event organised by Tumelo and Tom McPhail (hosted by Fidelity) and in preparation, I’ve been swatting up on what the legal niceties are around stewardship. The point of the meeting is to get those who do have voting rights to use them and to allow those who don’t have voting rights to influence voting

According to Tumelo, there are two ways that this can happen.

  1. Pass-Through Voting: Where the asset owner is able to vote the shares they hold within a fund.
  2. Expression of Wish: Where the asset owner indicates to their fund manger how they would like the shares to be voted. The fund manager retains the right to vote.

Georgia Stewart (Tumelo CEO) reckons that

pass through voting was one of 2022’s hottest topics in the industry due to several market forces converging; the concentration of voting power within ‘The Big Three’, divergent investor views on ESG, and a lack of universal voting solutions designed to support the industry in managing stewardship and fiduciary duty effectively.

I’m not sure that it was a hot topic for me in 2022, but it’s getting hotter as I’m doing work on how we measure the value we are getting for the money we put with fund managers.

Georgia is using next week’s event to ask whether people like me getting interested

Is this an indication that pass through voting will become more prevalent in 2023 and beyond or will we see alternatives stealing the limelight?

She’s right to ask. I have been struggling to vote the shares in my pension pot for a number of years and despite assurances from Legal & General , my workplace pension still does not offer me the option of expressing my wishes. So I’ll be looking at this issue with a jaundiced eye.


My jaundiced eye has been off the ball with regards my money because I have been more interested in using Tumelo technology than in understanding what the fiduciaries of my money (LGIM) have been doing on my behalf.

The expressions of wish of individual investors are what Tumelo has built its reputation on. Workplace pension providers have been keen to integrate Tumelo software as it supports their green credentials and makes for more engaged investors (who tend to invest more and improve plan margins). There is nothing wrong with that but we need to be careful that trustees and funders who have integrated Tumelo, do not take the foot off the pedal when it comes to exercising their much larger stakes in funds.

Of course it would be great if workplace pensions were to invest in segregated mandates where they are the only investor and not one of many (the pooled fund concept). But few workplace pensions are big enough to do this (NOW and Nest operate in this way – I am busy finding out if others do as well). But in practice, most of us invest our savings through trustees who choose pooled funds for our money.

It is clearly possible for these funds to offer trustees and funders of pooled funds the right not just to express their wishes, but to be granted delegated authorities through “pass through voting”.

Tumelo says that Pass through voting

enables you to offer the cost benefits of a pooled fund to your investors whilst giving them the control over their voting that a segregated mandate offers.

That looks a little too good to be true to me so my jaundiced eye will be testing just how far stewardship will be extended using its software. If my experience is anything to go by, Tumelo is being used by some pension providers as a diversionary tactic (from scrutiny of what they are doing to treat my money with the respect it deserves).


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions and tagged , , , , , . Bookmark the permalink.

1 Response to Stewardship of money in workplace pensions – my jaundiced-eye view!

  1. John Mather says:

    You could lower costs by buying shares directly. Few funds perform better than the index. Lazy money gets lazy returns. The British disease of winging needs curing

Leave a Reply