A prospective client asked me last quarter how she could tell whether a wealth manager’s sustainability commitment was real or marketing. She had read three firms’ brochures and could not separate them. Every one promised responsible investment, robust governance, and alignment with her values. Not one gave her a way to test the claim.
That is the gap. The market has plenty of writing on ESG investing, meaning which funds to buy. There is far less on the harder question a discerning client or adviser actually faces: is this firm a genuine steward of the assets it holds, and does it govern its own business to a standard I would trust with GBP 20 million?
This piece is about that second question. It is a practical framework for vetting a wealth manager’s stewardship and governance credentials, with the documents to demand and the answers that should reassure or alarm you.
Stewardship is not the same as ESG investing
The distinction matters because firms blur it deliberately.
ESG investing concerns portfolio construction: which companies, sectors, and screens. Stewardship concerns ownership: what the manager does with the voting and engagement rights that come with holding those assets. A firm can run a glossy ESG fund range and vote with company management on every contested resolution it faces. The portfolio looks responsible; the behaviour is passive.
The Financial Reporting Council defines stewardship as the responsible allocation, management, and oversight of capital to create long-term value. The operative word is management. A steward does something with ownership; an index buyer simply holds.
When a client asks whether a manager is committed to corporate responsibility, they are usually asking about stewardship and firm-level governance, even if they use the language of ESG. Answering the ESG question alone misses what they care about.
The three layers you are actually assessing
A complete view separates three things that are easy to conflate.
| Layer | The question | Where to look |
|---|---|---|
| Portfolio ESG | What does the firm buy and exclude? | Fund prospectus, holdings, exclusion policy |
| Active stewardship | What does the firm do as an owner? | Voting record, engagement reports, Stewardship Code report |
| Firm governance | How is the manager itself run? | Ownership structure, conflicts policy, board, regulatory record |
Most due diligence stops at the first layer. The firms worth recommending are distinguished by the second and third, and those are where the evidence is hardest to fake.
Layer one: active stewardship
Stewardship is visible in records, not promises. Three documents tell you almost everything.
The voting record
Ask for the full proxy voting record, resolution by resolution, not a one-page summary. Then look for the patterns that matter.
- How often did the firm vote against management? A firm that supports management on 99 percent of resolutions is not exercising judgement; it is rubber-stamping.
- How did it vote on contested pay reports, board re-elections, and climate or governance resolutions? These are the votes where a steward’s view is tested.
- Does it disclose voting at the individual holding level, or only in aggregate? Granular disclosure signals confidence; aggregate-only signals reluctance.
A manager unwilling to share a full voting record has answered the question by declining to answer it.
The engagement evidence
Engagement is where firms inflate the most. “We engaged with 200 companies last year” is a metric, not an outcome. Push for specifics.
- Name three engagements from the last twelve months and the result of each.
- What was asked for, what changed, and over what period?
- What happens when engagement fails? Escalation to a vote against the board, a public statement, or divestment shows a firm with teeth. No escalation path means engagement is a conversation with no consequences.
The difference between a steward and a tourist is whether anything happened.
The UK Stewardship Code report
The UK Stewardship Code is not a one-time badge. Signatories report annually against twelve principles, and the FRC removes firms whose reports do not demonstrate real activity and outcomes. That makes signatory status a useful first filter and the report itself the real evidence.
Read the most recent report and ask one question: does it describe specific engagements, votes, and results, or does it recite policy in the abstract? A report heavy on intention and light on outcome is a warning, not a reassurance.
Layer two: the firm’s own governance
A manager that governs its own business badly is a risk to client assets no matter how good the returns look. Firm-level governance failures, through opaque ownership, conflicted incentives, or weak controls, have harmed more clients than poor stock selection ever has.
Four areas deserve scrutiny.
Ownership and independence. Who owns the firm, and does that ownership create pressure that conflicts with client interests? A manager owned by a product provider has a structural incentive to favour in-house solutions. Independence is not automatically better, but the ownership structure should be visible and the conflicts it creates should be acknowledged.
Conflicts of interest policy. Ask for it and read it. A credible policy names the firm’s actual conflicts, such as in-house funds, platform economics, and connected custody, and explains how each is managed. A policy that lists only generic conflicts has not been written for this firm.
Fee transparency. Can the firm show the total cost a client bears, across management, platform, custody, and underlying funds, on a single page? Opacity here usually hides layering. A firm confident in its value will quantify it without being chased.
Regulatory standing. Check the FCA Register for the firm’s permissions, any disciplinary history, and the status of named individuals. Do this at outset and at every annual review, not once.
How this connects to suitability and Consumer Duty
For advisers, this is not optional diligence. If you recommend a manager partly on the strength of its stewardship or governance credentials, Consumer Duty expects a contemporaneous record of what you reviewed and why you were satisfied. The claim and the evidence behind it both need to be on file.
There is also a greenwashing dimension. The FCA’s anti-greenwashing rule requires that sustainability claims be fair, clear, and not misleading, and it applies to how you communicate a manager’s credentials to clients, not only to product manufacturers. The FCA’s finalised guidance on the rule sets the standard you are held to when you repeat a firm’s stewardship story to a client. If you cannot evidence it, do not say it.
This sits alongside broader fund due diligence, where the portfolio-level ESG assessment belongs. Stewardship and firm governance are the layers above the fund: they tell you whether the organisation behind the portfolio is one you would stake a client relationship on.
The questions to ask in the first meeting
Compress the framework into questions a prospective partner should be able to answer on the spot. Hesitation on any of them is itself an answer.
- Show me your full proxy voting record for the last year.
- Name three engagements and tell me what changed as a result.
- Are you a current UK Stewardship Code signatory, and may I see your latest report?
- Who owns this firm, and what conflicts does that create?
- Show me the total cost a client bears on a single page.
- What is your escalation path when engagement fails?
A firm that meets these without defensiveness is one whose marketing you can probably trust. A firm that deflects has told you what its brochure would not.
Where Alpha IO sits
Alpha Investment Office (FCA Ref 1019537) is built so that adviser partners can answer the questions above about their own client proposition. Voting and engagement activity, conflicts management, and a single consolidated view of total client cost through SEI custody are produced as standard rather than assembled on request. The founder, Stefano Del Federico, is a Chartered FCSI, and the firm’s governance and ownership are transparent by design.
If you want to test a prospective or incumbent manager against this framework, or compare what your clients currently receive, contact us to arrange a conversation.
The credential is the evidence, not the claim
Every wealth manager will tell you it is a responsible steward with strong governance. The ones worth trusting can prove it: a voting record that shows judgement, engagements with outcomes, a current Stewardship Code report, and a firm whose own house is in order.
Ask for the evidence. The firms that have it will hand it over. The firms that do not will explain why they cannot, and that explanation is the most useful thing they will tell you.
Frequently Asked Questions
What is the difference between ESG investing and a manager's own stewardship?
ESG investing is about which assets sit in a portfolio. Stewardship is about what the manager does with the ownership rights those assets carry: how it votes at company meetings, how it engages with company boards, and whether that activity changes anything. A firm can run ESG-labelled funds and still vote with management on every contested resolution. The two are related but separate, and they should be assessed separately.
How do I check a wealth manager's voting record?
Ask for the firm's full proxy voting record, not a summary. Most signatories to the UK Stewardship Code publish voting data, and many disclose it at the individual resolution level. Look at how often the firm voted against management on pay, board composition, and climate-related resolutions. A record that supports management on almost every vote tells you the firm's stewardship is nominal rather than active.
Does signing the UK Stewardship Code prove a manager is a good steward?
No. The FRC's Stewardship Code is reported against, not certified once and forgotten. Signatories must submit an annual report showing outcomes, and the FRC removes firms whose reports fall short. Signatory status is a useful filter, but read the firm's most recent stewardship report and check it describes specific engagements and results, not generic policy statements.
Why should a HNW client care about the manager's own governance?
A manager that governs its own business poorly, through opaque ownership, conflicted fee structures, or weak controls, is a structural risk to client assets regardless of headline returns. Governance failures at the firm level have caused more client harm than poor stock picking. For clients holding GBP 20 million or more with a single partner, the firm's own resilience is part of the suitability question.
What evidence should I keep on file for a manager's stewardship claims?
Keep the firm's latest stewardship report, its voting policy and voting record, its conflicts of interest policy, and a dated note of any specific engagement examples it provided. Under Consumer Duty, if you have relied on a manager's sustainability or governance credentials when recommending it, you need a contemporaneous record of what you reviewed and why you were satisfied.