February 18, 2019
Since the launch of the Main Street Investor Coalition, we have been dedicated to ensuring the views of retail investors are heard as fundamental changes in the investment landscape have empowered institutional investors and proxy advisory firms on matters of corporate governance. Today, we are launching a new page dedicated to sharing the perspectives of retail investors who are concerned that their professional money managers are no longer looking out for their best interests and instead using their positions to promote specific social and political opinions.
As continuously pointed out both here and on our new page, research has shown again and again and again that retail investors’ overwhelming priority is to maximize the returns from their holdings. In one study, an overwhelming 92 percent of those surveyed considered their pension fund’s ability to perform at or above target level to be important or very important, with nearly half indicating they will be relying on their pension fund for at least half of their retirement.
Members of the Main Street Investors Coalition agree with the stated views of retail investors. This is why members such as the American Council on Capital Formation, the National Association of Manufacturers, and the 60 Plus Coalition have extensively studied various issues of concern for retail investors like the negligible impact of environmental, social, and political resolutions on companies, and issues with proxy advisors such as rampant conflicts of interest, robo-voting, and factual and analytical issues underlying their recommendations.
On this new page, we will also highlight comments from retail investors to the U.S. Securities and Exchange Commission (SEC) as they work to improve the proxy process for everyday investors. Many main street investors have commented that they are concerned about the well-being of their investments and the motives behind their money managers. For many, these investments determine their future and meeting personal financial goals, from buying a home to planning for retirement. For example:
“I am concerned about my retirement 401(k) and mutual funds. I fear fund managers are using my money for their self-interest projects and not investing in my best interests. I’m set to retire in a few years and want to protect the investments I have built and saved for my entire adult life.”
–Linda Yasinsac, Comment to SEC
“Public pension plans should make investment decisions that will deliver the greatest return on investments and ensure that pensioners can receive the benefits promised for a lifetime of work. As fiduciaries, the leaders of public pension plans must make decisions that are not always popular. Retirement plans must control risk through sound investment policy, prudent stewardship and long-term financial gain.”
–Karen Shore, Comment to SEC
Finally, we will promote the voices of retail investors in the media. For instance, Nan Bauroth shared her perspective last week in Investor’s Business Daily explaining the rise of proxy advisory firms and the tremendous influence over corporate governance at American public companies such firms have gained:
“As a consequence, proxy firms are vicariously exercising significant influence over whether a shareholder resolution at a given company passes or fails. Research shows that a recommendation by the market leader, ISS, can influence a vote by as much as 25%.”
Visit this page to find out what everyday investors are saying and to quickly assess the latest research on this topic. The Main Street Investors Coalition looks forward to this new resource to highlight the views of retail investors as the SEC considers critical reforms to the proxy process.