Description of Services
The Simmons Capital Group Wrap Program (the Program) is an investment advisory program
sponsored by Simmons Capital Group (Simmons Capital). The Program provides clients with the
ability to trade in certain investment products without incurring separate brokerage
commissions or transaction charges.
To join the Program a person must:
1) Provide information about their financial needs, investment objectives, time horizon,
and risk tolerance, as well as any other factors relevant to their specific financial
situation and any other supporting documentation required for the Program;
2) Complete a new account agreement with the broker dealer approved by Simmons
Capital for participation in the Program (Broker-Dealer); and
3) Open a securities brokerage account with the Broker-Dealer (an Account) and deposit
those client assets designated for participation in the Program (Program Assets) into the
Account.
After an analysis of any information provided by the client to Simmons Capital, Simmons Capital
shall assist the client in developing an appropriate investment strategy for the Program Assets
in their Account(s) (the Investment Strategy). Thereafter, all clients are encouraged to discuss
their needs, goals, and objectives with Simmons Capital and to keep the Simmons Capital
informed of any changes thereto. Simmons Capital shall contact clients at least annually to
review its previous services and/or recommendations and to determine whether changes
should be made to their Investment Strategy.
Management of Your Portfolio
All clients in the Program shall grant Simmons Capital discretionary authority to buy, sell, and
otherwise trade in the type of securities described in Item 6 (below) for their Account(s) and to
liquidate previously- purchased securities that the client has transferred to their Account(s).
Program Assets in the client’s Account(s) shall be managed by one of Simmons Capital’
investment adviser representatives.
The Program may recommend that clients authorize the active discretionary management of
certain Program Assets by and/or among one or more independent investment managers
(Independent Managers) to implement a particular Investment Strategy. The terms and
conditions under which the client shall engage the Independent Manager(s) may be set forth in
separate written agreements between (1) the client and Simmons Capital and (2) Simmons
Capital or client and the designated Independent Manager(s). Simmons Capital shall continue to
render advisory services to the client relative to the ongoing monitoring and review of account
performance, for which Simmons Capital shall receive an annual advisory fee which is based
upon a percentage of the market value of the Program Assets being managed by the designated
Independent Manager(s). Factors that the Registrant shall consider in recommending
Independent Manager(s) include the client’s stated investment objective(s), management style,
performance, reputation, financial strength, reporting, pricing, and research. In addition to
Simmons Capital’ written disclosure statement, the client shall also receive the written
disclosure statement of the designated Independent Manager(s).
Neither Simmons Capital nor the client may assign the Program Agreement without the consent
of the other party. Transactions that do not result in a change of actual control or management
of Simmons Capital shall not be considered an assignment.
Fees for Participation in the Program
Clients in the Program pay a single annualized fee for participation in the Program (the Program
Fee). Simmons Capital shall charge an annual fee based upon a percentage of the market value
of the assets being managed by Simmons
Capital. Simmons Capital’s annual fee shall be
prorated and charged quarterly, in arrears, based upon average daily balance of the assets
being managed by Simmons Capital. The annual fee shall vary (between 0.85% and 1.50%)
depending upon the market value of the assets under management. A separate fee
arrangement may be established depending on the independent manager selected.
Simmons Capital, in its sole discretion, may negotiate to charge a lesser management fee based
upon certain criteria (i.e., anticipated future earning capacity, anticipated future additional
assets, dollar amount of assets to be managed, related accounts, account composition, pre-
existing client, account retention, pro bono activities, etc.).
Under the Program, clients receive investment advisory services, custody and execution of
transactions in securities for a single, combined annualized fee, the Program Fee. Participation
in the Program may cost the client more or less than purchasing such services separately. The
number of transactions made in the client’s Account(s), as well as the commissions charged for
each transaction, will determine the relative cost of the Program versus paying for execution on
a per transaction basis and paying a separate fee for advisory services. The Program Fee may be
higher or lower than fees charged by other sponsors of comparable investment advisory
programs.
Clients may incur certain charges imposed by third parties in addition to the Program Fee such
as fees charged by Independent Managers, charges imposed directly by a mutual fund or
exchange traded fund in the account, which shall be disclosed in the fund’s prospectus (e.g.,
fund management fees and other fund expenses), charges imposed by private funds (to the
extent the applicable Program Account is qualified and has elected to include such assets in its
portfolio, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and
electronic fund fees, and other fees and taxes on brokerage accounts and securities
transactions.
Co-Managed Accounts
For accounts co-managed with Steward Advisors Group, LLC (“Steward”), the Program Fee may
be directly debited from the applicable account(s), either by Simmons Capital or Steward. The
Program Fee will be shared among Simmons Capital or Steward as set forth in a Co-
Management Agreement between Simmons Capital and Steward. Simmons Capital will not
receive any fees with respect to co-managed accounts, other than a share of the Program Fee
payable to Steward.
Fees for Management During Partial Quarters of Service
For the initial period of participation in the Program, the Program Fee shall be calculated on a
pro rata basis. The Program Agreement between Simmons Capital and the client will continue
in effect until terminated by either party pursuant to the terms of the Program Agreement. The
Program Fee shall be prorated through the date of termination and any remaining balance shall
be refunded to the client in a timely manner.
Additions may be in cash or securities provided that Simmons Capital reserves the right to
liquidate any transferred securities or decline to accept particular securities into a client’s
account. Simmons Capital may consult with its clients about the options and ramifications of
transferring securities. However, clients are advised that when transferred securities are
liquidated, they are subject to transaction fees, fees assessed at the mutual fund level (i.e.,
contingent deferred sales charge) and/or tax ramifications.
If assets are deposited into or withdrawn from an account after the inception of a quarter, the
Program Fee with respect to such assets will be prorated based on the number of days
remaining in the quarter.