Stewardship ReportsStewardship Reports

Finance 300Portfolio Management Simulation

Steward:Steward:

The title of Steward was sometimes given to the person in charge of a noble's domestic staff and household. In some countries, the duties of a steward became more substantial, and included the management of finances and property. The House of Stuart, which eventually became the royal house of Scotland (and England), originally gained both its position and its name from their position as stewards to the king.

Wikipedia (http://www.answers.com/topic/steward?method=5&linktext=steward)September 28, 2006

Portfolio Management SimulationPortfolio Management Simulation

The Stewardship Report is an accounting document by which the Portfolio Manager(s) Reports to the client Audits the broker Lets his Manager/Company know he's doing a

good job and won't get them fired or sued.

This is you

CLIENT:Nice person

who pays you to manage

his portfolio

PORTFOLIO MANAGER

PORTFOLIO MANAGER

UISES is your broker

PORTFOLIOMANAGER

CLIENT

Client Relations

hip Broker Relationship

Professional RelationshipsProfessional Relationships

CLIENT

Stewardship Report

Management Report

Stewardship ReportStewardship Report Boss(Professor)

Email Correspondence

PORTFOLIOMANAGER

Client ReportClient Report

Consists of Title Page Summary of Assets Transactions Record Income Statement

Client ReportClient Report

Provides the client with a complete, accurate report of his portfolio.

Acts as evidence that you are a thorough, trustworthy steward of the client’s financial assets.

Management ReportManagement Report

Demonstrates to your Boss/Professor that you balanced the statement to itself and to UISES before you sent it to the client.

Management ReportManagement Report

Consists of Management Report Summary Brokerage Statement

Thebrokerage

Statement is a source

document; changing the numbers on a

source document

gets you an F (for Fraud)

Management ReportManagement Report

Compares the numbers derived from the Stewardship report with the numbers on the brokerage report to make sure that they balance.

Management ReportManagement Report

CASH BALANCES Report UISES BalanceCash Balance 359,147.73$ 359,147.73$ BalanceBook Value of Equity 646,960.00$ 646,960.00$ BalanceBook Value (Total) 1,006,107.73$ 1,006,107.73$ Balance

MARKET VALUE Report UISES BalanceCash Balance 359,147.73$ 359,147.73$ BalanceMarket Value (Total) 1,072,347.73$ 1,070,737.73$

Accruals: 1,610.00$ 1,072,347.73$ Reconciled

UISES Statement Attached

MANAGEMENT REPORTInternational Investments

Each number in the Report column is taken directly from the stewardship report.

Each number in the UISES column is typed in from the UISES statement.

BalanceBalance

Balance means that two things are found equivalent.

Market ValueMarket Value

The Stewardship Report template contains balance points that raise a red flag if the balance condition is not met.

Out of BalanceOut of Balance

Book Value Out of balance

Book Value Out of Balance

OUT OF OUT OF BALANCEBALANCE

Out of balance report = F

Out of balance report with the red flags removed to disguise the discrepancies = J

OUT OF BALANCEOUT OF BALANCE

An out of balance flag is a symptom of a problem – so dig out the cause of the problem, don’t just paper over the symptom

OUT OF BALANCEOUT OF BALANCE

Bernie Ebbers ->

<- Andrew Fastow

Bernie Madoff ->

<- Sir Robert Allen Stanford

Stewardship ReportsStewardship Reports

A perfect score on the stewardship report means that I could send it to the client as is. This requires: that the report balances to itself and to UISES that the format is clean and professional

Guide to Stewardship ReportsGuide to Stewardship Reports