Our policies

Engagement policy

We aim to promote effective stewardship and long-term investment decision making, by enhancing the transparency of our investment and engagement strategies.

Our voting records


The Charles Stanley group has developed a strong and distinctive corporate culture, underpinned by our company values:

  • Fair
  • Caring
  • Progressive

These values apply to all aspects of our operations and services as a firm. They speak to the sustainability of our business model and the benefits our investment offering provides our clients. Our express purpose is to create long-term value for our clients and stakeholders, including staff and shareholders. All Charles Stanley policies and procedures are reviewed frequently in light of this, with references where appropriate to ESG, Stewardship and Engagement principles. We pride ourselves on providing personalised investment management and advice. This means assuming responsibility for helping our clients to grow their wealth and achieve their financial goals. Historically a stockbroking firm, we are now a holistic wealth management firm and our investment services are significantly wider. This means facing the challenges in balancing the varying Stewardship and Engagement needs of our clients. Whilst some clients may want to retain investment control, only asking Charles Stanley to help them carry out their investment decisions, approximately two thirds of our total assets under management and administration comprise discretionary managed clients, which is now the core of our business. These clients entrust our investment managers to make investment decisions based on each client’s specific needs, taking into account their objectives, time horizon, risk appetite and any ethical views. To provide this truly bespoke service to clients, our investment managers have complete independence over investment decisions.

ESG in our investment process

Charles Stanley is a responsible investor and has policies and procedures that allow our investment managers to integrate Environmental, Social and Governance (ESG) measures when constructing and monitoring managed client portfolios. We believe this better enables our investment managers to assess the non-financial risks and opportunities investments and overall portfolios are exposed.

In addition to ESG integration, we also encourage our investment managers to vote on behalf of their client holdings at AGMs and EGMs. Under our client terms, we are only able to exercise these votes for our discretionary managed clients. For our largest 100 holdings by value across our discretionary clients, we use a proxy voting adviser, Institutional Shareholder Services (ISS). We believe its voting recommendations, and engagements with company management, are in line with our values. While ISS makes recommendations and guidance, we have the right to disagree and instruct them to vote differently on our behalf. Where clients give us voting instructions we will see to carry these out as
instructed.

Charles Stanley is a signatory to the United Nations Principles for Responsible Investment (UNPRI). Under its reporting guidelines, our firm is provided with review and assurance that our approach to Stewardship and Engagement continues to service our client needs effectively. The Shareholder Rights Directive as amended (SRD II) aims to promote effective stewardship and long-term investment decision making, by enhancing the transparency of asset manager investment and engagement strategies. As an investment firm providing portfolio management services to clients, Charles Stanley is considered an asset manager. This document sets out our engagement policy, in line with the requirements of SRD II.

Governance

At Charles Stanley we believe that effective governance allows us to exercise our stewardship and engagement duties, in the wider framework of responsible investing. We believe oversight of responsible investment starts at Board level, setting the cultural expectations and tone across the firm. Day-to-day responsibility for responsible investment (RI) lies with our investment managers as they create bespoke RI solutions for our clients, while the Responsible Investing Committee is responsible for the continuing oversight and development of our RI approach and capabilities, alongside our corporate values. Reporting to the Executive Committee, it operates on a three pillared approach.

The actions of our responsible investment committee are guided by the principles laid out in our Approach to Responsible Investing. 

Training and education 

At Charles Stanley, all our investment managers undertake annual mandatory training on integrating ESG into investment portfolios as a minimum. We also have a dedicated ESG analyst in the Research team, who is responsible for considering and reporting ESG issues.

Our ESG specialists

Tina Cook

Tina Cook

Head of Equity Research

Tina heads the UK Equity Strategy Committee. She is a Chartered Fellow of the Chartered Institute for Securities & Investment (CISI) and achieved Chartered Wealth Manager status in 2013. In the 2011 Financial Times/StarMine Awards for Europe, she was rated the number one stock picker for the utilities sector. Tina holds a DPhil in Psychology from Oxford University and an MSc in International Securities, Investment and Banking from the ICMA Centre.

- CFA Institute: Certificate in ESG Investing

- CBI: Certificate in Green and Sustainable Finance

- PRI Academy: Advanced RI Analysis

- GRI: Professional Certification Program

    Jane Bransgrove

    Jane Bransgrove

    Director of Asset Management

    Jane joined Charles Stanley in 2013 when the company acquired Pan-Asset Capital Management. Having studied Accounting and Financial Management at Loughborough University, Jane now looks after private clients, charities and trusts and manages model portfolios for financial advisers, specialising in active asset allocation combined with passive implementation. She is an Associate member of the CFA Society of the UK and Chartered Member of the Chartered Institute for Securities & Investment.

    - CFA Institute: Certificate in ESG Investing

    Lewis James-Lawrence

    Lewis James-Lawrence

    Associate Analyst - ESG Research

    Lewis joined Charles Stanley in March 2021 as an Associate Analyst to focus on ESG research.  He is a graduate o the University of Kent with a Master’s degree in Finance, Investment and Risk. Lewis has passed Level 1 of the CFA.

    - CFA Institute: Diploma in Investment Management (ESG)

    ESG in our investment process

    Charles Stanley believes in an active approach to managing client portfolios, both in terms of asset allocation and stock selection. We believe this is the most appropriate method of generating the returns our clients expect, whilst allowing for the flexibility that their personal circumstances may require. We give our investment managers the freedom to create and manage client portfolios that reflect individual client needs. This can include return expectations, risk appetite, and a number of individual needs like cherished holdings or known future liabilities, including Capital Gains Tax. As a result, our managers require a high degree of flexibility in the investment approach they adopt and the range of investments they can use. Nonetheless, we ensure that all client portfolios are managed within the appropriate risk parameters and in line with clients’ investment time horizons.

    Research sits at the heart of Charles Stanley’s investment activities and we have a well-resourced Research Team, which provides the full range of investment support and guidance covering asset allocation, active and passive third-party funds and direct equity investments. Charles Stanley takes a broad approach when evaluating the merits of an investment. In addition to financial considerations, we recognise that non-financial risk factors – including ESG – can also influence a company’ performance. We take a multifaceted approach to including responsible investment in our investment process, which includes observing the principles of Stewardship and Engagement as outlined here, considering ESG in our investment analysis, and voting on client holdings where appropriate.

    We believe combining top-down and bottom-up research helps us achieve our central purpose better. This is to maximise risk-adjusted returns for our clients by investing in companies with sustainable business models that can deliver long-term growth. We take a bottom-up approach to ESG analysis and this is carried out by our research analysts and investment managers. But In keeping with our customised approach to building client portfolios, investment managers are not tied research recommendations. ESG is one of many factors we consider when forming a view of the risks and opportunities companies and industries face. It is not an overriding investment objective. If a company has, or develops, serious ESG issues which could have a major impact on its future performance, this will be flagged to the investment managers. As engagement can be time consuming we might make the decision to sell our clients’ holdings rather than lobby the Board for change. 

    To help our ESG analysis we use data from a leading ESG rating provider. We have conducted extensive due diligence on the provider of our ESG data and are satisfied with its policies and procedures, which we keep under review. As a wealth manager our clients are predominantly retail clients, who do not have their own policies on stewardship and engagement. Where our clients are institutional investors, such as charities and pensions funds, we take into account stewardship and investment policies. Negative and positive values-based screening is client-led and is not imposed on clients unless they are looking for a portfolio that uses these approaches. We do not participate in securities lending with client holdings.

    Our approach to stewardship

    The Stewardship Code is overseen and published by the Financial Reporting Council, an independent regulator responsible for financial reporting, accounting and auditing, and corporate governance standards. The Code sets the benchmark for institutional investors to meet ownership obligations in respect of UK companies. The FRC expects firms to “apply and explain”, meaning signatory firms must apply all principles and explain how they have done this. Whilst Charles Stanley is not a signatory of the FRC Stewardship Code, we endeavour to use its principles to help shape and inform our stewardship approach.

    Charles Stanley primarily manages the assets of retail investors with a limited number of institutional clients. However, we think it is in the interests of all our clients that we disclose our policy on how we exercise voting rights relating to investments held on their behalf.

    Discharging our stewardship responsibilities 

    As a financial services organisation, our primary responsibility is to maximise the investment returns of our clients in accordance with our contractual relationships, and in our view this is always best achieved through the consistent identification of quality investment opportunities for our clients’ funds, and to dispose of investment holdings where we are dissatisfied with that investment’s prospects for share price appreciation or income. In this way, we see stewardship of investee companies as an integral part of the wider investment process and employ various methods of engaging and monitoring to achieve this.

    Under Charles Stanley’s terms of business, our firm has the contractual right to vote only on behalf of clients where we have a discretionary investment management mandate. We do not have a similar contractual right to vote on behalf of investments held by our advisory and execution-only clients, where they are solely responsible for exercising their right
    to vote. As Charles Stanley is a whole of market firm, offering a broad range of investment services and asset classes, the typical aggregate holding size tends to be smaller than that of a larger asset manager with more consolidated holdings. This reduces the scope for direct engagement with the management of investee companies. Our favoured approach, therefore, is based on the identification of high quality investment opportunities, and the disposal of investments where there is dissatisfaction with their prospects for share price appreciation or income.

    However, we recognise that to maximise investment returns might sometimes need a greater level of engagement with investee companies, including having an active dialogue with company management. In such cases the resources used will be managed according to the circumstances of each case. We do not outsource our stewardship responsibilities, even though our voting decisions may be based on the research and recommendations of external proxy voting service providers. Whilst Charles Stanley is one of the UK’s top ten wealth management firms as measured by assets under management, we are not considered to be systemically important by our regulator. However, no matter its size, each firm has a role to play in contributing towards the effectiveness of the financial systems. By ensuring our business is solidly financed and conservatively run, with a strong risk control culture we are able to continually ensure that Charles Stanley does not pose undue risk to the financial system given our assets under management.

    We are also active members of industry bodies such as the Investment Association and The Investment and Savings Association (TISA), to ensure we can cooperate on regulatory and financially systemic issues.

    Our guidelines on when and how we escalate our stewardship activities

    Where we have significant direct holdings in individual companies, we may seek to act in the best interest of the clients by exercising any votes controlled by our firm. We might also meet company management on an ad hoc or regular basis to find out whether the company has satisfactory policies and governance arrangements in place. If we think a company has environmental, social or governance arrangements that are not in the best interests of shareholders, we might discuss this with the management
    or disinvest from the company.

    Where we wish to escalate matters, we can exercise the rights to ‘vote against the management’ on behalf of our discretionary clients as well as collaborate with our peers to apply pressure. We employ the services of a proxy voting service provider. However, due to the wide number of securities we invest in for our
    discretionary clients, we only vote routinely for our 100 largest holdings by total value. For these shares we will tend to vote in accordance with the recommendations of the proxy voting service provider, although we reserve the right to vote differently. 

    For major corporate actions like mergers and acquisitions, our research team will advise our investment managers how to vote in the best interests of shareholders. However, investment managers are free to decide how to vote. Many investments held for our clients take the form of collective investments, including passive funds. These hold a large number of investments, but any voting will be at the discretion of the funds’ managers and not Charles Stanley. This means there is less scope for Charles Stanley to influence directly the governance of these companies. Our team of collectives analysts carries out regular interviews with the managers of many collective funds. Their ongoing analysis and monitoring approach includes discovering whether a fund manager complies with the Stewardship Code and their approach to voting shares held in their funds.

    Compliance with the Code is recorded as part of each fund update report so that Charles Stanley investment managers can assess whether the funds they hold on behalf of clients meet this criterion. Whilst our autonomous investment model can complicate the integration of stewardship and engagement across Charles Stanley, within our centralised research team we offer investment managers the ability to follow centralised model portfolios for UK and international equities. Within this guidance, when equities are being discussed and debated for inclusion or removal, stewardship and ESG considerations are included in the discussion. Investment rationales always include financial and non financial considerations and are highlighted clearly in our research papers. Our researchers escalate stewardship activities when interacting with investee companies. This can be built upon at the request of our investment managers.

    How we approach conflicts of interest

    Our policy summary regarding conflicts of interest is regularly reviewed and any changes approved by the Board. It is set out in Our Services and Business Terms. Where Charles Stanley exercises its contractual right to vote on behalf of discretionary clients, the votes are always exercised in the interests of clients. The Charles Stanley group takes all appropriate steps to identify conflicts of interest between: the group, including its managers and staff, and its clients; and one client and another client, that arise or may arise in the course of providing investment services. This includes conflicts arising from the receipt of inducements from third parties, or by the group’s own remuneration and other incentive structures. Any specific situations that have been identified as an area where potential conflicts of interest may arise are set out in the firm’s Conflicts Register.

    The Charles Stanley group maintains and operates effective organisational and administrative arrangements to take all appropriate steps to prevent or manage such conflicts from adversely affecting interests of clients. For the purpose of identifying the types of conflicts of interest that may arise, and which may entail a risk of damage to clients’ interests, the group takes into account whether the group or a member of staff:

    • Is likely to make a financial gain, or avoid a financial loss, at the expense of the client
    • Has an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome
    • Has a financial or other incentive to favour the interest of another client or group of clients over the interests of the client
    • Carries on the same business as the client
    • Receives or will receive from a person other than the client an inducement in relation to a service provided to the client, other than the standard commission or fee.

    The Charles Stanley group’s procedures for approving new business activities, products or services also include consideration of any new conflicts that may arise as a result. When service providers are engaged with for the purposes of providing Stewardship and ESG, conflicts management procedures are followed, and any actual or potential conflicts identified are recorded and mitigated. This is revisited on an annual basis, to review any existing Stewardship related conflicts and identify any new conflicts which may have arisen in the preceding 12 months. Inevitably, conflicts of interest may arise from time to time, for example where there is voting on matters affecting both clients and Charles Stanley itself or where Charles Stanley is the manager of a collective investment fund in which the firm’s discretionary investment management clients are invested. Where there is such a conflict that in our view cannot be readily resolved, the matter would be escalated to senior management for an independent decision on whether and how such shares should be voted.

    How we engage actively with companies in which we invest 

    Whilst we maintain an autonomous business model, investment managers are able to rely on guidance from our in-house research department, which provides specialist advice on asset allocation, stock selection and collective vehicle selection. Engagement and monitoring will largely be a function of the centralised investment research process. As a long-established UK investment firm, Charles Stanley has frequent opportunities to meet with the management of actual and prospective investee companies. Monitoring is carried out by reviewing company financial reporting, in conjunction with news and announcements and when research is being conducted into investment ideas.

    We meet regularly with investee companies and fund managers and both capital structure and corporate governance are key areas considered among a wide range of issues such as strategy and investment performance. Where a company does not comply with the spirit of the UK Corporate Governance Code, in our opinion, we will consider its explanation as one factor in forming our overall view on whether the company represents a quality investment opportunity for our client. Views are clearly expressed in analyst research output, which is made available to all investment managers.

    In the case of collective investments such as funds, we routinely identify fund managers who are compliant with the Stewardship Code and UN Principles for Responsible Investment and this is detailed in our internal research for investment managers. However, investment managers have discretion over whether to follow the recommendations of the Research team. As outlined in this document, where the higher costs of additional engagement appear justified where we control the votes, we may seek to engage the board or management of the investee company. From time to time, issuers of securities and their advisers may seek to engage with us in relation to a new issue of shares where there may be an element of inside information. All such enquiries must be directed through our New Issues Desk (NewIssuesDesk@Charles-Stanley. co.uk), which has processes for evaluating approaches and coordinating our firm’s response.

    Our approach to collective engagement with other investors

    Where we deem it appropriate and effective, we will seek to engage collectively with other investors, and to escalate our activities in collaboration with them. Any such engagement would be on a case-by-case basis. Through our membership of the Principles of Responsible Investment’s Collaborative Engagement Platform, we have worked with other members to exert influence over industries in which our clients have direct or indirect exposure when we believe there is scope for improvement in the standard of business practice as we view this to be in the long term interests of our clients. A key engagement we have been involved in is the Human Rights in the Extractive Industry initiative. The core aim is to assess how well target companies recognise the degree of human rights risks given the nature of their business, and propose ways in which they can improve disclosure of their human rights practices to encourage better standards within the industry.

    Charles Stanley invests in third party funds, and we expect fund managers to comply with the Stewardship Code where appropriate. Our analysts will engage with fund managers at least annually in line with our normal fund due diligence, and provide feedback to fund managers where considered necessary or useful for helping them improve their stewardship and ESG practices. We benefit from our proxy adviser’s pooled engagement service allowing us to work with other shareholders on issues. We can also start pooled engagement issues with other shareholders via the service if a greater engagement with company management is needed. We believe this is the best approach given our autonomous investment model. 

    As a firm we are unlikely to have significant holdings in many issuers and the pooled engagement service allows us to amplify our voice by collaborating with other shareholders. This is a new service from ISS that allows us to create and take part in more effective collective engagement opportunities. Once this is more established, we will be able to report on collective engagements and outcomes we have contributed to. In general, we welcome any opportunity to work with our peers to engage with companies in which we invest to allow us greater influence in raising ESG and governance standards.

    How we vote on behalf of our clients 

    We believe voting is an effective method of engagement and we support our clients in exercising their right to vote where possible. As noted before, we use the services of a proxy voting service provider to advise us on corporate governance issues, and provide voting recommendations on our top one hundred holdings of equity and fund securities.

    Our proxy adviser, ISS has provided us with their benchmark policies for conducting research and generating voting recommendations. The advice of our proxy voting service provider is based on the UK Corporate Governance Code and its own set of voting principles is built on a collection of industry best practice guidelines, which are designed to protect and enhance shareholders’ interests. ISS has a long-standing relationship with many of the UK-listed issuers within its coverage universe and regularly engages with the senior management teams of such issuers. ISS has a set of benchmark policy recommendations and proxy voting guidelines. These comprise four main areas: operational items, board of directors, remuneration and capital structure. There is also another set of guidelines for ESG related matters. SS conducts rigorous analysis and investigation in line with these policies for the investee companies on which it intends to recommend a vote.

    We have recently reviewed the services they provide for us in relation to proxy voting and have revisited their policies. In doing so we have reconfirmed that we are happy to continue using their benchmark voting policy, but additionally have signed up to their sustainable voting policy to ensure that our commitment to exercising voting rights are utilised as fully as possible. 

    With knowledge of the UK Corporate Governance Code and a long history of corporate engagement, we believe the advice from our proxy voting service provider enhances our engagement with investee companies. We believe it complements our investment strategy and client needs, and the recommendations they provide are based on values which align to ours. However, we are not bound to follow the advice of ISS and retain the ultimate say on which way to vote on each item raised at general and extraordinary shareholders meetings, based on what we believe is in the best interests of our clients. Where we believe it would assist shareholder interests, we may inform the company in advance of our voting intentions.

    Report on our stewardship and voting activities

    Charles Stanley does not provide routine reports to clients on stewardship and voting as it relates to their holdings. On an annual basis by 30th June each year, however, we report on the implementation of the principles of this policy and disclose publicly our most significant votes during the previous calendar year. ‘Most significant votes’ is defined as the size of our shareholding as a proportion of an issuer’s total voting rights. In practice, we would expect to report on our voting record for at least shareholdings of 3% or more of the issuer’s voting rights. The report will also seek to disclose other potentially useful metrics. Our annual disclosure can be found here. We regard our clients as the only stakeholder to whom we owe a duty of reporting, where requested. We are happy to disclose and report further details of voting matters on request, at frequencies to be agreed. Such disclosure would relate solely to votes exercised on behalf of the requesting client. 

    We do not provide bespoke engagement reports. Where clients request a voting report, we would direct them to the reports disclosed on our website. Where our non-managed clients ask us to vote on their behalf and request voting information relating to those votes, we are able to provide high level information on number of shares voted and if the votes were cast for or against the management in each resolution. We provide a vote disclosure on our website, in which clients can interactively customize the dashboard containing our voting records across the top 100 discretionary holdings for the past year. The dashboard is customisable by meeting type, sector, market, and geographical location. We do not seek independent assurance of our stewardship activities and voting performance, on the basis that the level of engagement and the scale of the firm’s activities for clients would not justify the additional expense to clients. Report on our stewardship and voting activities.