INVESTMENT ADVISORY SERVICES
Smith Shellnut Wilson, LLC (“SSW” or “Adviser”) was founded in 1995 and offers
investment advisory services which include discretionary and non-discretionary
management of investment portfolios for a variety of clients including, but not limited to,
financial institutions, individuals, trusts and business entities in accordance with the
investment objective(s) of the client. In addition, SSW may provide consulting services on
investment-related matters. The firm is a wholly owned subsidiary of b1BANK. As of
December 31, 2022, SSW managed approximately $ 7,758,485,196 with $ 1,097,911,752
being non-discretionary and $ 6,660,573,444 being discretionary.
Investment Management Services
Through the use of discussions, interviews and/or client questionnaires, SSW assists each
client in determining investment goals and identifying risk tolerance levels. These
investment goals are captured in a document referred to as an “Exhibit A”. Once this
process is complete, SSW develops a customized investment portfolio for the client using a
mix of domestic and foreign equities, fixed income securities, mutual funds and exchange
traded funds and other products deemed suitable for the client. SSW recommends Trust
Preferred Securities (“TruPS CDOs”) for its clients, as well as other structured securities.
Client portfolios are diversified based upon their risk profile, investment horizon, financial
goals, income needs (current and potential), and other various suitability factors.
Individual securities are selected primarily with the aid of fundamental analysis and the
review of independent research, news sources and rating services. The selection of
securities may be influenced by SSW’s relationship with clients who issue securities, and
that selection of such securities serves to provide funding for SSW’s clients issuing the
securities, representing an actual or potential conflict of interest. SSW has a material
interest in its clients remaining well-financed, as financial difficulties for its clients may
result in a reduction in fees and assets under management for SSW.
SSW may recommend securities for a client account that are, at the time of purchase,
considered illiquid or may subsequently become illiquid. Illiquid securities, including
alternative investment products such as real estate investments, hedge funds, private
equity, and collateralized debt obligations such as pooled trust preferred securities involve
a high degree of risk, may engage in leveraging or other speculative investment practices
that increase the risk of investment loss, may not be registered with the Securities and
Exchange Commission, may not be required to provide periodic pricing or valuation
information to investors, and may involve complex tax structures and delays in distributing
important tax information. Illiquid securities generally involve subjective
valuation/pricing issues which will affect the value and performance of a client account, are
not subject to the same regulatory requirements as publicly traded securities, may charge
higher fees which could offset any trading profits, and, in some cases, the underlying
investments are not transparent and are only known to the investment manager. The value
of illiquid securities can be volatile, resulting in erratic investment performance. An
investor could lose all or a substantial amount of his or her investment. There are usually
significant restrictions on transferring interests in any illiquid investment. In some cases,
pricing for illiquid securities is provided to SSW by brokerage firms or custodians used to
execute transactions for you and/or other of our clients, representing a potential conflict of
interest. In addition, SSW manages accounts, such as reserve accounts associated with real
estate limited partnerships. The fact that the managers sponsoring illiquid investments are
also SSW clients results in a potential conflict of interest.
Portfolio management services are offered to clients on a discretionary and non-
discretionary basis. Restrictions and guidelines imposed by clients affect the composition
and performance of portfolios. For this reason, performance of portfolios within the same
investment
objective may differ.
Financial Planning & Consulting Services
SSW provides financial planning services consistent with the client’s personal financial
situation, goals, objectives and expectations. SSW will obtain the financial information and
other necessary data from the client for the consultation or to prepare the written Financial
Plan/Report/Analysis. Financial planning services may include, but are not limited to
retirement readiness and cash flow projections, assessment of stated financial goals,
analysis of current investment holdings, risk management (e.g., life insurance, auto
insurance, liability coverage, etc.), estate planning review (excludes legal or tax advice) or
education funding analysis. The services applicable to each arrangement will be dictated in
the client agreement.
SSW provides consulting services to clients involving a review of various asset
management and valuation issues, including pricing and impairment analysis of certain
illiquid securities, third-party pricing validation services for the purposes of FDICIA and
Sarbanes-Oxley requirements, Asset/Liability Management and Independent
Asset/Liability Management Model Validations.
SSW also performs consulting services for accounts for which it monitors external advisory
performance.
Clients are advised to promptly notify SSW if there are any changes in their financial
situation or investment objectives or if they wish to impose any restrictions upon the
Adviser’s management services.
Retirement Plan Advisory Services
SSW provides retirement plan advisory services on behalf of the retirement plans (each a
“Plan”) and the company (the “Plan Sponsor”). SSW’s retirement plan advisory services are
designed to assist the Plan Sponsor in meeting its fiduciary obligations to the Plan and Plan
Participants. Each engagement is customized to the needs of the Plan and Plan Sponsor.
Services generally include:
• Vendor Analysis
• Plan Participant Enrollment and Education
• Investment Policy Statement (“IPS”) Design and Monitoring
• Investment Oversight Services (ERISA 3(21)
• Investment Management Services (ERISA 3(38)
• Performance Reporting
• Ongoing Investment Recommendation and Assistance
• ERISA 404(c) Assistance
SSW may provide investment advisory services on behalf of the Plan and Plan Sponsor,
which may be in either a 3(21) or 3(38) context depending on whether or not SSW is also
providing discretionary investment management over the Plan assets. For 3(38) services,
SSW shall have the discretion to select the investments for the Plan and/or make
investment decisions on behalf of Plan Participants.
These services are provided by SSW serving in the capacity as a fiduciary under the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In accordance
with ERISA Section 408(b)(2), the Plan Sponsor is provided with a written description of
SSW’s fiduciary status, the specific services to be rendered and all direct and indirect
compensation SSW reasonably expects under the engagement.
Written Acknowledgement of Fiduciary Status
When we provide investment advice to you regarding your retirement plan account or
individual retirement account, we are fiduciaries within the meaning of Title I of the
Employee Retirement Income Security Act and/or the Internal Revenue Code, as applicable,
which are laws governing retirement accounts. The way we make money creates some
conflicts with your interests, so we operate under a special rule that requires us to act in
your best interest and not put our interest ahead of yours. Under this special rule’s
provisions, we must:
• Meet a professional standard of care when making investment
recommendations (give prudent advice);
• Never put our financial interests ahead of yours when making
recommendations (give loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and
investments;
• Follow policies and procedures designed to ensure that we give advice that is
in your best interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest.