00:00Let's talk a little bit about this. So my understanding is, you know, after I check the weather, I can
00:05say to Alexa, take me to Vanguard Investor Choice and basically she'll do that. How did this come together?
00:13Yeah, thanks. So we're really excited about the program as we're excited about Investor Choice, as you and I have
00:18talked about before.
00:20It is an opportunity for us to let end investors and Vanguards ETFs and index mutual funds express their voice
00:28in proxy voting.
00:29So it was a natural collaboration with Amazon, given that Alexa is kind of the default for many as a
00:34voice agent, to allow the end investor to access our Investor Choice program in an easy way to get the
00:40information.
00:40Actually can send you a link right to your cell phone that you can then go into our app and
00:44sign up directly in the app.
00:45Was there a lot of demand for something like this? Is this something that investors had voiced discouragement or, I
00:53guess, you know, just complications with when it comes to engaging in these shareholder activities?
00:58I think that the big opportunity we see is making Investor Choice easy. Well, I think it's easy to buy
01:03or sell an ETF if you can allow the end investor to express their preference or get their voice heard
01:09related to proxy voting.
01:10That's a good thing. We recognize that one of the challenges is both awareness and then reducing the friction, frankly.
01:18You know, one of the benefits of our approach to Investor Choice is that we're not asking investors to go
01:23to the S&P 500 fund and say, I'm going to pick five.
01:26I'm going to make proxy voting choices at 500 companies or for our total stock ETF, it would be 3
01:32,000 companies. This is the opportunity for an investor to go in, look at a set of balanced menu of
01:38policy choices, make a selection that they think both best represents what
01:43they think is going to be in their interest to maximize the return on their investment when it comes to
01:48proxy voting, their views on, you know, CEO compensation or board member elections.
01:53They can make that selection and then whenever they want to change it, they can change it. But if they
01:58want to, they can just leave it. Right. And it stays forever. And that's the ease of use that we're
02:01going after.
02:02Well, it's interesting because you think about, you know, any type of vote. Encouraging participation is a big hurdle. I
02:09imagine it's something you think about all the time. So obviously a program like this trying to get to the
02:14heart of that problem.
02:15With that in mind, do you have any more of these types of partnership planned or, you know, that you're
02:21thinking about and in discussion about?
02:23So we have we're really excited about the progress we've made for investors who come directly to Vanguard. As you
02:28know, there's multiple ways to buy a Vanguard ETF or a mutual fund.
02:31You can go directly to us through Vanguard.com. And in that case, what we've done is we've built it
02:36actually into the digital experience.
02:38So it's in the app. It's on the website. It's quite easy to do. And we're seeing good participation. We're
02:43actually over 10 percent of investors in the funds that have been eligible are participating, which is great news from
02:49a retail investor in the first year or two.
02:52Off platform, it's a little more complicated. And that's where you'll see us continue to innovate with different industry partners
02:57to make it easier for an investor wherever they hold a Vanguard fund to be able to express their
03:01interest in proxy voting. I'm curious whether institutional shareholder services, ISS or any of those other proxy companies have come
03:08out and engage with you on this, because it seems like an opportunity, if nothing else.
03:12It's interesting. We don't. Well, we do have two third party options in the menu.
03:17One of the things that we've been talking to regulators and policymakers about is, you know, there are lots of
03:22questions about the proxy advisory ecosystem, if you will, and the number of providers and the voices.
03:28And we actually see investor choice as a way to bring more voices into the system.
03:32We have tens of thousands. Over time, we'll have millions of investors now expressing their voice and relying on third
03:38parties, different proxy advisors is a great way for them to do that.
03:40So in this partnership, I'm curious how you thought through elements such as cyber security risk and things along those
03:48lines, because, you know, adding on a third party like this, obviously a way to boost engagement, participation.
03:54But, you know, there's some elements that you can't control as well.
03:58Yeah. So you can imagine Vanguard has lots of very smart people work on these topics.
04:02We have a very thorough vetting process. And I think you can rest assured that Amazon, the same as true
04:07on their end.
04:07So it's been a long process to get us here through this collaboration, but we're really excited about working with
04:11a high quality partner.
04:12And as I said, for us, the end goal is to make it as easy for an investor to voice
04:17their preferences on proxy voting as it is to do anything else.
04:20How quickly can this be implemented?
04:22It's up and running. I actually did it this weekend myself.
04:25No kidding.
04:26Yep. No, we did. My wife and I went through the process with some bated breath, but it works. It's
04:30exciting.
04:30So if anyone wants to go to Alexa, you can simply say, Alexa, take me to Vanguard's Investor Choice program.
04:37It comes up with information.
04:38It can actually, as I said, even send you a link directly to your phone that you can sign up
04:42and go from there.
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