CAPSOUTH WEALTH MANAGEMENT

Firm Brochure Part 2A of Form ADV March 24, 2026 This brochure provides information about the qualifications and business practices of CapSouth Partners, Inc., dba CapSouth Wealth Management. If you have any questions about the content of this brochure, please contact us at: (334) 673-8600, or by email at mbolden@capsouthwm.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission, or by any state security authority. Registration with the SEC or a state regulatory authority does not imply a certain level of skill or expertise. Additional information about CapSouth Partners, Inc. is available on the SEC’s website at www.adviserinfo.sec.gov. You can search this site by a unique identifying number knows as a CRD number. The CRD number for CapSouth Partners is 132517. 2216 W. Main Street Dothan, AL 36301 www.capsouthwm.com  Item 2 - Material Changes Annual Update The Material changes section of this brochure will be updated at least annually when material changes occur since the previous release of the Firm Brochure. Material Changes since the March 2024 Annual Filing CapSouth no longer has any business relationship with United Capital Financial Advisors, LLC (“United Capital”) and does not utilize their FinLife Partners technology platform. As such, all language related to United Capital and FinLife Partners has been removed. This language was found in sections 4.B.i, 4.F, 10.D, 12.A, 12.A.i, 12.A.iii, and 15. Sections 4.B.i, 5.B, 12.A of the previous filing discussed services CapSouth could offer to held away accounts via the Pontera Solutions, Inc. (“Pontera”) platform. CapSouth is not utilizing these services and has no current intent to utilize them in the future. As such, all language related to services we can provide to held away accounts and all references to Pontera have been removed. Full Brochure Available If you would like to receive a complete copy of our Firm Brochure, please contact us by telephone at (334) 673-8600 or by email at mbolden@capsouthwm.com. - 2 -  Item 3 - Table of Contents 1 Item 1 – Cover Page Item 2 - Material Changes 2 Item 3 – Table of Contents 3 Item 4 - Advisory Business 5 5 10 10 11 11 A. Firm Description B. Types of Advisory Services Offered C. Tailored Relationships D. Wrap Fee Programs E. Managed Assets F. Miscellaneous Items Item 5 - Fees & Compensation 12 18 18 19 20 A. Description & Standard Fee Schedule B. Client Payment of Fees C. Other Fees Paid by Clients D. Prepayment of Fees E. Compensation for Product Sales Item 6 - Performance Based Fees 21 Item 7 - Types of Investment Advice Clients 21 Item 8 - Methods of Analysis, Investment Strategies and Risk of Loss 21 22 22 A. Methods of Analysis B. Investment Strategies C. Primary Security Types Utilized by CapSouth Item 9 - Disciplinary Information 23 23 23 A. Criminal or Civil Actions B. SEC or Regulatory Agency Proceedings C. Self-Regulatory Organization (SRO) Proceedings Item 10 - Other Financial Industry Activities & Affiliations 23 23 23 A. Broker Dealer or Registered Representative Registrations B. Futures and/or Commodities Registrations C. Relationships Material to Advisory Business D. Recommendation of Other Investment Advisors or Other Types of Professionals and Associated Conflicts of Interest 24 - 3 -  Item 11 - Code of Ethics, Participation or Interest in Client Transactions & Personal Trading 24 A. Code of Ethics B. Investment Recommendations Involving Securities in which CapSouth or 24 25 Its Employees have a Material Financial Interest C. Participation or Interest in Securities Held by Clients D. Employee Trading in Securities Traded by Clients or Recommended to Clients 25 Item 12 - Brokerage Practices 25 28 A. Selecting Broker-Dealers/Custodians B. Trade Aggregation Item 13 - Review of Accounts 28 28 28 A. Periodic Reviews B. Review Triggers C. Regular Reports Item 14 - Client Referrals & Other Compensation A. Benefits Provided to CapSouth from External Sources and Related 29 29 30 Conflicts of Interest B. Incoming Referrals C. Referrals to Other Professionals Item 15 - Custody 30 Item 16 - Investment Discretion 30 Item 17 - Voting Client Securities 31 31 Item 18 - Financial Information A. Balance Sheet B. Financial Conditions Likely to Impair CapSouth’s Ability to Meet Client Commitments C. Bankruptcy Petitions in Last 10 Years 31 31 - 4 -  Item 4 - Advisory Business 4.A - Firm Description CapSouth Partners, Inc. (“CapSouth”, “ADVISER”, “we”, or “us”), dba CapSouth Wealth Management, was founded in 2001 by Donald P. Bolden. There are currently 22 employees composed of 13 investment advisory representatives and 9 administrative staff employees. The firm is federally registered with the SEC (Securities and Exchange Commission) as an Investment Advisor (Being registered with the SEC does not imply a certain level of skill or expertise). Donald P. Bolden is the Principal Owner of CapSouth Partners, Inc. Five other employees each hold minority ownership positions. 4.B - Types of Advisory Services Offered CapSouth offers one or more of the following advisory services, where appropriate, to individuals, high net worth individuals, pension and profit sharing plans, trusts, estates or charitable organizations, corporations or other business entities: ● ● ● ● Investment management services (Discretionary & Non-discretionary) Financial planning services Institutional consulting services Consulting services to individual clients At the start of a client relationship, CapSouth will identify a client's financial background, prior investment experience, investment objectives, goals, restrictions (if any), and risk tolerances, among other things. This information is used in determining which planning recommendations are appropriate for the client and/or which investment recommendations we believe are in the client’s best interest. CapSouth will update this information on a periodic basis. We also advise all clients to notify us immediately if there are any changes to their financial situation, investment objectives, and/or goals. 4.B.i - Investment Management Services Discretionary Investment Management CapSouth manages some client assets on a discretionary basis. A client who has given CapSouth discretionary management over an account has granted to CapSouth the discretion to select securities, asset amounts to be invested in a security, and the timing of any trades or to select and implement an investment strategy provided by a Sub-Manager. CapSouth manages accounts that are under discretion in the following ways: 1. CapSouth managed investment strategies 2. Advisor managed investment strategies 3. Utilization of a sub-advisor (“Sub-Manager”) to perform the investment selection, allocation of investments and trading within the account. 1. CapSouth builds and manages investment strategies and makes these strategies available to clients. These are allocations designed to meet a particular investment - 5 -  goal. These strategies may contain stocks, bonds, no-load mutual funds, eligible load-waived mutual funds, ETFs, covered call options and other investments. Discretionary strategies are managed by Marshall P. Bolden and Peter Ramsey. 2. Investment Advisor Representatives of CapSouth can select the individual investments that are utilized in a client account on a discretionary basis as opposed to utilizing a Sub-Manager or a CapSouth portfolio. These accounts usually contain stocks, no-load mutual funds, eligible load-waived mutual funds, ETFs, and CDs. These accounts are managed based upon the client’s specific goals and objectives for the account and based upon any applicable tax considerations of the account. 3. CapSouth may outsource the investment management of an account to a Sub- Manager. For the assets directed to a Sub-Manager for investment services, the Sub- Manager responsibilities include the authority to: • exercise discretion to determine the types of securities bought and sold, along with the percentage allocation • apply its discretion as to when to buy and sell • apply its discretion as to the timing of transactions • select the broker dealer for execution of securities transactions, if appropriate, and • take other portfolio management actions CapSouth delegates or deems appropriate ‐ Manager ‐ ‐ Manager’s investment style. Additionally, upon request, Manager’s Form ADV, Part 2A ‐ Upon request, CapSouth will provide clients with information about any Sub to which CapSouth has referred client assets. This information may include content provided by a Sub Manager explaining its investment style, or an explanation from CapSouth describing the Sub CapSouth will provide clients with a copy of the Sub and/or Form ADV Part 3. ‐ Managers Client has the right to request restricting the appointment of any and all Sub to manage their assets. ‐ Sub-Managers are not affiliated with CapSouth. Sub-Managers are granted limited discretionary investment authority over assets that CapSouth assigns to them. Any authority of a Sub-Manager only applies to the specific assets for which Sub-Manager has been appointed as the discretionary manager. Sub-Manager shall not provide investment advice, or have any advisory responsibility to the client, beyond the assets for which it is appointed as Sub Manager. ‐ Nondiscretionary Investment Management We provide nondiscretionary portfolio management services to clients. Investment Advisor Representatives use the client’s investment objectives and risk tolerance when making recommendations to clients. Trades are entered only with the consent and approval of the client. We may also enter non-solicited trades per the client’s request. 4.B.ii - Financial Planning Services Specific planning services to be provided to any client will vary based upon the client’s situation and needs and will be specified in the agreement executed by the client and - 6 -  CapSouth. In the provision of planning services, CapSouth will often provide a consolidated financial summary of accounts to clients; data included usually contains information about accounts for which CapSouth does not manage or advise the client. As such, no inference should be drawn that CapSouth serves as the adviser on all securities listed in a consolidated financial summary. For client assets that CapSouth is not contracted to manage, we will not actively supervise those assets. Financial planning services are typically offered and provided on an ongoing basis unless the agreement between CapSouth and the client specifies the planning is a one-time service. For ongoing services, CapSouth will meet with the client at least annually and will periodically update the financial plan and provide other services as requested by the client. CapSouth has three levels of financial planning services. The specific level of planning a client will receive will be specified in the agreement executed by the client and CapSouth. Guidance Services (basic financial planning) CapSouth offers planning services designed to meet individual clients’ specific needs. These services may include one or more of the following and may also include other services specific to the client: • Development of a financial plan • Asset allocation reviews of accounts held in ERISA plans • Insurance needs analysis limited to life, disability and long term care insurance • Education planning The Guidance program is provided through RightCapital. Clients can receive online access to RightCapital through which they can view details of their plan. The plan is updated every two to three years, or as needed, as long as the client provides us with updated personal information. Wealth Management Services Wealth Management services include the services offered within Guidance services. These services may also include one or more of the following and may also include other services specific to the client: • Cash flow planning • Management of concentrated stock positions • Review of corporate stock options, restricted stock units, and deferred comp plans for which client is eligible and or participating in • Charitable planning • Tax loss management • Review of estate plan documents • Special needs planning • Coordination with client’s tax and legal advisors Private Wealth Services Private Wealth services include the services offered within Guidance and Wealth Management. Private Wealth services are primarily tailored to those clients with generational legacy considerations and/or business owners. These services may include one or more of the following and may also include other services specific to the client: • Advanced investment strategies such as options trading or private placements • Generational family legacy planning • Business owner consulting in the areas of: - 7 -   Company stock plans  Operating agreements  Business transfers  Key person planning One Time Planning (no ongoing review or updates) This service is designed to build a point in time plan with no ongoing assistance, planning reviews, or plan updates. Clients that prefer a One Time Plan will select a service level and specific services to be provided; this will be detailed in the agreement executed between the client and CapSouth. Online access to RightCapital will be provided upon request so the client can view their financial plan. A hard copy will also be provided upon request. A One Time Plan can be transitioned to an ongoing relationship per the client’s request at the completion of the One Time Plan. 4.B.iii - Institutional Consulting Services CapSouth provides several advisory services separately or in combination to institutional clients. The primary clients for these services are defined benefit and defined contribution pension retirement plans. Institutional Consulting Services are comprised of several distinct services. Clients can choose from any or all the services offered by CapSouth. Investment Policy Statement (IPS) We will meet with the client to determine the investment goals, objectives, policies, constraints and risk tolerance. We will then prepare a written IPS stating those goals and objectives. The IPS will provide guidance for the selection of investment options and the procedures and timing interval for the monitoring of the selected investment options. The client is responsible for review and final approval of the IPS. No assurance can be given that the client will achieve the investment objectives in the IPS. For clients with existing pension or profit sharing plans, we will evaluate any existing IPS and current investment options. We will then meet with the client to discuss and revise, as necessary, the plan’s investment objectives and to revise the IPS if necessary. Investment Manager / Mutual Fund Search Report (for non 3(38) clients or non- discretionary clients) We will provide an Investment Manager/Mutual Fund Search Report consistent with the mutually agreed upon level of analysis. This report will be designed to provide the client with a list of investment managers whose investment philosophies and policies are, in the judgment of CapSouth, compatible with the client’s investment objectives, policies, constraints and risk tolerance, as stated in the IPS. It is the client’s decision as to which investment managers to retain, and CapSouth does not assume responsibility for the client’s selection of an investment manager or the manager’s investment decisions or performance. An investment manager’s past performance is not necessarily indicative of future performance. Ongoing Investment Manager Due Diligence CapSouth will perform ongoing monitoring of the investment managers to ensure policy compliance within the established guidelines of the IPS. - 8 -  Performance Monitoring Reports CapSouth will periodically provide Performance Monitoring Reports based on the procedures and timing intervals stated in the IPS. The Performance Monitoring Reports will evaluate the performance of the client’s investments over various time periods as well as comparing various aspects of such performance to benchmarks and peer groups, as established in the IPS. Discretionary Fiduciary Services (ERISA Section 3(38) Investment Manager) We can also provide discretionary fiduciary services, acting as a fiduciary under the Employee Retirement Income Security Act of 1974, as amended (ERISA), solely with respect to the provision of investment advice as that term is defined under ERISA and will serve as an “investment manager” as defined in Section 3(38) of ERISA. A responsible plan fiduciary (“RPF”) (or an authorized delegate of this fiduciary) must first develop an investment policy statement (“IPS”). Once the IPS is established and approved, we can review the investment options available through the plan and will notify the plan’s record- keeper (platform provider) providing instructions to add, remove or replace specific “core” investment options to be offered to plan participants in accordance with the IPS guidelines. We can monitor the core investment options and, on a regular basis, provide reports to the RPF and provide instructions to the plan’s record-keeper (platform provider) to remove or replace investments as appropriate in light of the IPS criteria. When we are retained to provide discretionary fiduciary services, we will act as an Investment Manager and we will have the final decision-making authority with respect to removing or replacing investment alternatives in the core lineup, and the RPF will not have any further responsibility to communicate instructions to any third-party service provider (unless required by a third-party service provider). This authority is limited to the plan’s core lineup. Should the client or a plan sponsor request investment options not recommended by CapSouth, these investment options will be considered non-core options. Employee Education and Communication For pension, profit-sharing and 401(k) plan clients in which participants exercise control over their own assets, CapSouth can also provide periodic educational support and investment workshops designed for the participants. The nature of the topics to be covered will be agreed upon by the client and CapSouth. The educational support and investment workshops will not provide Plan participants with individualized, tailored investment advice unless the Participant Advice feature detailed directly below is included in the services that CapSouth is contracted by the client to perform. Asset Allocation Models CapSouth can provide investment advice to the client with respect to the establishment and management of asset allocation models. The models shall: A. B. C. be based on generally accepted investment theories that take into account the historic, long term returns of different asset classes; assure that all material facts and assumptions on which the models are based accompany the models when presented to participants; be accompanied by a statement indicating that other investment alternatives having similar risk and return characteristics may be available, dependent upon the other investment options the plan sponsor has chosen to make available within the plan, and identifying where information on those investment alternatives can be obtained; and - 9 -  D. be accompanied by a statement indicating that, in applying particular asset allocation models to their individual situations, participants or beneficiaries should consider their other assets, income, and investments in addition to their interests in the plan. The participants have the option of selecting their own asset allocation and managing the investments themselves or to select one of the asset allocation models. These models are usually comprised of the funds that the participant has access to through the plan. CapSouth will notify the plan provider to make changes to these models without the participant’s prior approval. The client (Plan Sponsor) retains, and will exercise, final decision-making authority over the selection and monitoring of the investment options within the plan. Participants may transfer their accounts out of the models per the Plan's administrative guidelines and per any trading restrictions, requirements, or applicable fees. Participants can enroll in this program either at the time of plan enrollment or online after initial plan enrollment. Marshall P. Bolden and Anthony B. McCallister determine the asset allocations and make investment decisions for these models. Additional Services for Employee Benefit Plans: We can also consult with the plan sponsor in the areas of plan design, administration, and provider due diligence, request for proposals, fee negotiations, enrollment packages, and fiduciary responsibilities. The services to be offered will be determined by the client and will be specifically outlined in the contract. 4.B.iv – Other Consulting Services to Individual Clients Services may be provided that are not described above. These services will be clearly defined in the client’s contract. 4.C - Tailored Relationships Our advisory services or recommendations are tailored to the individual needs of clients. Client goals and objectives are discussed in meetings or through correspondence and are used to determine the recommendations to the client. The goals and objectives for each client are maintained electronically or in hard copy format. CapSouth will accept limited security restrictions from clients on accounts invested in the CapSouth managed investment strategies, discussed in section 4.B.i (1) above. For accounts managed by CapSouth in which a Sub-Manager is utilized, reasonable client security restrictions may be permitted depending upon the investment strategy of the Sub- Manager that is selected by the client and the types of restrictions the client would like. 4.D – Wrap Fee Programs A wrap-fee program is defined as any advisory program under which a specified fee or fees not based directly upon transactions in a client’s account is charged for investment advisory services (which can include portfolio management and/or advice concerning the selection of other investment advisers) and the execution of client transactions. CapSouth does not participate in or sponsor any wrap fee programs. All of our services are provided on a non-wrap fee basis which means fees and expenses for execution of client transactions charged by the client’s broker/dealer and/or custodian are billed directly to the client’s account separately from our advisory fees. - 10 -  4.E - Managed Assets As of December 31, 2025, CapSouth Partners, Inc. managed approximately: $1,001,269,513 of assets in 1392 accounts and 28 defined contribution plans. Approximately $437,169,831 is managed on a discretionary basis. Approximately $43,226,670 is managed on a non-discretionary basis. Approximately $520,873,012 is in defined contribution plans to which CapSouth provides continuous and regular supervisory services. 4.F – Miscellaneous Items Client Responsibilities CapSouth does not verify the accuracy of information received from clients or from other professionals who work with clients. CapSouth will assume this information is accurate; it is the responsibility of the client to provide accurate information or to notify CapSouth if inaccurate information has been provided to us. Various planning services offered by CapSouth rely on the client providing requested information. The quality of these planning services may be adversely affected should the client not provide requested information, and CapSouth may not be able to complete some planning services should the client fail to provide requested information. In such cases, CapSouth will complete planning services to which we have contractually agreed to the extent possible; CapSouth will not be obligated to refund any portion of planning fees should we not be able to complete all the agreed upon services due to a client’s failure to provide requested information. It is also the responsibility of the client to promptly notify CapSouth of any pertinent changes in their financial situation, goals, and/or investment objectives. Retirement Plan Participants that are also Investment Management Clients & Retirement Plan Rollovers – Conflicts of Interest CapSouth Partners can be named as the Investment Advisor on a retirement plan in which a participant is also an individual client of CapSouth. This dual relationship creates a conflict of interest if the individual client expresses interest in moving assets from the retirement plan into an account(s) for which CapSouth would provide Investment Management services. To mitigate this conflict of interest, CapSouth does not give participant distribution or rollover advice to participants in an ERISA plan. CapSouth will provide education as to the options a person has upon leaving an employer through which they have an account in an ERISA plan. These options include: 1. Leave their account in the former employer’s plan 2. Rollover their account to a new employer’s plan 3. Rollover their account to an IRA and/or Roth IRA 4. Cash out the account 5. Some combination of the above options - 11 -  If a client or potential client elects to use CapSouth as the advisor for a rollover to an IRA or Roth IRA account from an ERISA plan, a rollover disclosure form must be signed by the client and the CapSouth investment advisor representative of the client. Item 5 - Fees and Compensation 5.A - Description & Standard Fee Schedule CapSouth Partners, Inc. primarily bases its fees on a percentage of client assets under management. Alternatively, we have the ability to base fees on assets under advisement, or net worth, or may charge flat fees or hourly fees. All fees are negotiable with the exception of the 0.06% (6 basis point) fee charged by CapSouth to participating employer’s plan assets that are in a Pooled Employer Plan (PEP) for which CapSouth serves as the ERISA 3(38) advisor. Investment advisor representatives of CapSouth have the ability to increase or decrease standard fees dependent upon the scope of services a client requests. Fees among clients will differ depending on the services provided to them and the complexity of their situations. Fees for each service are explained in more detail below. 5.A.i – Investment Management Services Fees ● ● ● ● The standard fee for investment management only services is charged as a percentage of assets under management. There is a minimum annual fee of $2,500 per household. The minimum fee may be reduced or increased at the discretion of an investment advisor representative. An increase or decrease can be applied to the fee schedule based on the services a client would like CapSouth to provide and the client’s assets under management with CapSouth. The client’s exact fee schedule is shown on the client’s signed contract. A client may be charged a flat percentage fee or dollar fee, instead of utilizing the fee schedule, if the client and investment advisor representative choose to do so. Fees are charged in advance at the beginning of each quarter. ● Fees are based on the account values as of the end of the previous quarter (unless ● otherwise stated in the contract). Fees are prorated based on the number of days in which the account was under management for the quarter. Additions and withdrawals that affect fees more than $10 will result in a prorated fee adjustment during the quarter of the addition or withdrawal. Account Balances are totaled together for clients in the same household to determine the blended fee (see the sample fee calculation below). Some clients may be grandfathered into older fee schedules that CapSouth has used in the past. Investment Management Services Fee Schedule AUM $0 to $250,000 $250,000 to $1,000,000 $1,000,000 to $2,500,000 Over $2,500,000 Fee 1.15% 0.85% 0.65% 0.50% Sample Fee Calculation Based on the Investment Management Services Fee Schedule: A typical quarterly fee for a client with two investment management accounts and who is subject to this fee schedule would be calculated as follows: - 12 -  Acct # 1 Balance as of billing date: Acct # 2 Balance as of billing date: $350,000 $400,000 Total Assets Under Management (AUM): Blended Fee Rate Quarterly fee Annualized Fee $750,000 0.95% per year $1781.25 $7125 5.A.ii – Planning Services Fees Guidance Services The fee for this service can be a flat fee or be based on a percentage of the client’s total assets under management with CapSouth. The fees are determined based upon the services to be provided and the complexity of each case. Initial fees are determined at the beginning of the relationship and are stated in the signed client agreement. There is a minimum annual fee of $4,000 per household. The minimum fee may be reduced or increased at the discretion of an investment advisor representative. Fees will normally be calculated and billed in advance at the beginning of each quarter. The client may choose whether to have fees billed directly to them or be deducted from their accounts managed by CapSouth. Total client fees will vary from client to client depending on the agreed upon services and a client’s assets under management. At the advisor’s discretion and depending on the complexity of the client needs, the fees for this service may be included in the services CapSouth offers under its Planning Fee Schedule (detailed below) if the client has at least $350,000 of assets under management with CapSouth. The fee arrangement will be detailed in the advisory agreement with CapSouth that the client signs. If a client has assets under management with CapSouth of under $350,000, the client will likely sign an agreement placing the assets under management on the Investment Management Fee Schedule and will have a separate planning agreement that will provide fees for the Guidance Services. A typical Guidance Fee ranges from $5,000 to $12,000 per year. Wealth Management Services The fee for this service can be a flat fee or be based on a percentage of the client’s total assets under management with CapSouth. The fees are determined based upon the services to be provided and the complexity of each case. Initial fees are determined at the beginning of the relationship and are stated in the signed client agreement. There is a minimum annual fee of $10,000 per household. The minimum fee may be reduced or increased at the discretion of an investment advisor representative. Fees will normally be calculated and billed in advance at the beginning of each quarter. The client may choose whether to have fees billed directly to them or be deducted from their accounts managed by CapSouth. Total client fees will vary from client to client depending on the agreed upon services and a client’s assets under management. At the advisor’s discretion and depending on the complexity of the client needs, the fees for this service may be included in the services CapSouth offers under its Planning Fee Schedule (detailed below) if the client has at least $1 million of assets under management with CapSouth. The fee arrangement will be detailed in the advisory agreement with CapSouth that the client signs. If a client has assets under management with CapSouth of - 13 -  under $1,000,000, the client will likely sign an agreement placing the assets under management on the Investment Management Fee Schedule and will have a separate planning agreement that will provide fees for the Guidance Services. A typical Wealth Management Fee ranges from $10,000 to $30,000 per year. Planning Fee Schedule AUM $0 to $250,000 $250,000 to $1,000,000 $1,000,000 to $2,500,000 Over $2,500,000 Fee 1.50% 1.20% 1.00% 0.75% Sample Fee Calculation Based on the Planning Fee Schedule: A typical quarterly fee for a client with two investment management accounts and who is subject to this fee schedule would be calculated as follows: Acct # 1 Balance as of billing date: Acct # 2 Balance as of billing date: $350,000 $400,000 Total Assets Under Management (AUM): Blended Fee Rate Quarterly fee Annualized Fee $750,000 1.30% per year $2437.50 $9750 Private Wealth Services The fee for this service can be a fixed dollar fee or be based on a percentage of the client’s total assets under management with CapSouth or can be a combination of a fixed dollar fee and a percentage fee of assets under management. The fees are determined based upon the services to be provided and the complexity of each case. Initial fees are determined at the beginning of the relationship and are stated in the signed client agreement. There is a minimum annual fee of $30,000 per household. The minimum fee may be reduced or increased at the discretion of an investment advisor representative. Fees will normally be calculated and billed in advance at the beginning of each quarter. The client may choose whether to have fees billed directly to them or be deducted from their accounts managed by CapSouth. Total client fees will vary from client to client depending on the agreed upon services and a client’s assets under management. The fees for this service can be set via various methods. The method of setting fees is at the advisor’s discretion; however, the client may request an alternate method. Standard methods include: 1. The fees for this service may be specified as a percentage fee applied to assets under management according to the Planning Fee Schedule (detailed above). This requires a client to have at least $3 million of assets under management with CapSouth unless otherwise approved by an investment advisor representative of CapSouth. 2. The fees for this service may be specified as a percentage of assets under management, billed according to the Private Wealth Fee Schedule (detailed below). 3. The fees for this service may be a fixed dollar amount. 4. The fees for this service may be a combination of a fixed dollar amount and a percentage fee of the client’s total assets under management with CapSouth. - 14 -  The fee arrangement will be detailed in the advisory agreement(s) with CapSouth that the client signs. A typical Private Wealth Fee ranges from $30,000 to $100,000 per year. Private Wealth Fee Schedule AUM $0 to $2,500,000 $2,500,000 to $5,000,000 $5,000,000 to $10,000,000 Over $10,000,000 Fee 0.95% 0.85% 0.75% 0.65% Sample Fee Calculation Based on the Private Wealth Fee Schedule: The quarterly percentage fee on assets under management for a client with two investment management accounts and who is subject to this fee schedule would be calculated as follows. Note, a fixed annual dollar fee may also be applied that would be in addition to this sample fee calculation. Acct # 1 Balance as of billing date: Acct # 2 Balance as of billing date: $2,000,000 $3,000,000 Total Assets Under Management (AUM): Blended Fee Rate Quarterly fee Annualized Fee $5,000,000 0.90% per year $11,250 $45,000 One Time Planning Services The fee for a One Time Guidance or Wealth Management Services is typically a flat fee but can also be structured as an hourly fee or a percentage of assets. The fee will be determined based on the complexity of each case. The fee is determined at the beginning of the relationship and stated in the signed agreement. The terms of payment are also specified in the client agreement. For clients paying a flat fee, all the fee or a portion of the fee may be invoiced in advance; amounts not invoiced in advance will be invoiced at time periods and amounts specified in the agreement. Hourly clients are billed monthly or quarterly in arrears at the beginning of each month or quarter. For hourly clients, an estimated total cost can be provided, and a deposit may be required. Estimates for hourly work are not guaranteed. A typical One Time Guidance Plan fee ranges from $3,000 to $6,000. A typical One Time Wealth Management Plan fee ranges from $7,500 to $15,000. Sample hourly rates: Advisors and Executive Officers Associate Advisors Client Service Associates & Administrative Staff up to $400/hr up to $250/hr up to $150/hr 5.A.iii – Fees for Consulting Services to Individual Clients The fee for a Consulting Services is typically a flat fee but can also be structured as an hourly fee or a percentage of assets. The fee will depend on the nature and complexity of the client's consulting needs. All fees are agreed upon prior to entering into a contract. CapSouth has a minimum consulting fee of $2,500. The minimum fee may be waived at the discretion of a CapSouth investment advisor representative. For clients paying a flat - 15 -  fee, all the fee or a portion of the fee may be invoiced in advance; amounts not invoiced in advance will be invoiced at time periods and amounts specified in the consulting agreement. Hourly clients are billed monthly or quarterly in arrears at the beginning of each month or quarter. For hourly clients, an estimated total cost can be provided, and a deposit may be required. Estimates for hourly work are not guaranteed. All terms of payment are specified in the consulting agreement. Sample hourly rates: Advisors and Executive Officers Associate Advisors Client Service Associates & Administrative Staff up to $400/hr up to $250/hr up to $150/hr 5.A.iv – Fees for Institutional Consulting Services CapSouth is deemed to be a fiduciary to advisory clients that are employee benefit plans pursuant to the Employee Retirement Income and Securities Act. Our firm is subject to specific duties and obligations under ERISA and the Internal Revenue Code that include among other things, restrictions concerning certain forms of compensation. To avoid prohibited transactions, we may only charge fees for investment advice about products for which our firm and/or related persons do not receive any commissions or 12b-1 fees. Standard Institutional Consulting Services Fees for traditional, stand-alone ERISA plans (does not apply to Pooled Employer Plans/PEPs) The fee for Institutional Consulting Services will be an asset based fee expressed as a percentage of plan assets, a flat annual fee, or a combination of an asset based fee and flat dollar fee per plan participant. The fee will be based on the services requested, plan size, plan demographics, and investment complexity. Typically, a minimum annual fee of $5,000 applies. Plan sponsors will normally be invoiced in advance at the beginning of each quarter based upon the value of the plan at the end of the previous quarter or the agreed upon flat fee; certain recordkeepers may require CapSouth to bill in arrears or to bill on a monthly basis. Plan sponsors may elect to have the fee taken out of the assets of the plan by the record keeper or to have the fee paid by the plan sponsor. These fees are negotiable. For clients whose fees are assessed as a percentage of assets the current fee schedule used by CapSouth for Institutional Consulting Services is: Asset Level: $0 - $999,999 $1,000,000 to $1,999,999 $2,000,000 to $4,999,999 $5,000,000 to $9,999,999 $10,000,000 to $19,999,999 Above $20,000,000 Fee: 1.0% 0.35% 0.25% 0.10% 0.05% 0.02% Sample Fee Calculation Based on the Institutional Consulting Fee Schedule: The quarterly percentage fee on plan assets would be calculated as follows. Sample Plan Balance as of billing date: $2,500,000 Blended Fee Rate 0.59% per year - 16 -  Annualized Fee Quarterly fee $14,749.99 $3687.50 Certain services offered to plan sponsors may result in an additional fee depending upon the scope of the services to be provided; any such fees can be paid from plan assets or directly by the plan sponsor. Services that may have additional fees include additional participant education meetings beyond the amount agreed to in the client agreement, plan setup and conversion, and assisting a client with merging another corporate retirement plan into the client’s plan Pooled Employer Plan (PEP) Fees for ERISA 3(38) Services The fee for these services is 0.06% (6 basis points) of the participating employer’s retirement plan assets. The fee is billed quarterly in arrears and is based upon the plan assets at the end of the previous quarter. This fee is not negotiable. Participating employers may elect to have the fee taken out of the assets of the plan by the record keeper or to have the fee paid by the participating employer. Pooled Employer Plan (PEP) Fees for Consulting Services The fee for these services is an asset based fee, per the PEP Fee Schedule below, that is applied to the participating employers plan assets. The fee is billed quarterly in arrears and is based upon the plan assets at the end of the previous quarter. The fees from the PEP Fee Schedule are negotiable. Participating employers may elect to have the fee taken out of the assets of the plan by the record keeper or to have the fee paid by the participating employer. PEP Fee Schedule Asset Level: $0 - $1,999,999 $2,000,000 to $3,999,999 $4,000,000 to $9,999,999 Above $10,000,000 Fee: 0.45% 0.22% 0.12% 0.04% Sample Fee Calculation: The quarterly percentage fee on plan assets would be calculated as follows. This sample calculation applies only to PEP Consulting Services; if CapSouth also provides ERISA 3(38) Services, the 0.06% fee on plan assets would also apply. Sample Plan Balance as of billing date: $2,500,000 PEP Fee Schedule Blended Fee PEP Fee Schedule Annualized Fee PEP Fee Schedule Quarterly Fee 0.404% per year $10,100 $2525 Certain services offered to plan sponsors may result in an additional fee depending upon the scope of the services to be provided; any such fees can be paid from plan assets or directly by the plan sponsor. Services that may have additional fees include additional participant education meetings beyond the amount agreed to in the client agreement, plan setup and conversion, and assisting a client with merging another corporate retirement plan into the client’s plan. - 17 -  5.B – Client Payment of Fees Investment Management & Planning Services Fees For accounts held at a custodian utilized by CapSouth, clients may choose to have CapSouth fees deducted from each account, to a designated brokerage account, or to a combination of these options. Clients may also choose to be invoiced directly. The client must approve in writing via their signed agreement how fees are to be paid. All fees are charged quarterly in advance. Stand Alone Planning Services Fees Any fees for planning services that are separate from the fees a client pays for Investment Management or Planning Services are detailed in an agreement signed by the client. For clients paying a flat fee, all the fee or a portion of the fee may be invoiced in advance; amounts not invoiced in advance will be invoiced at time periods and amounts specified in the agreement. Hourly fees are charged either monthly or quarterly, per the client planning agreement, in arrears; an estimated fee may be charged in advance. Institutional Consulting Fees For Institutional clients not in a Pooled Employer Plan (PEP), CapSouth normally invoices the plan sponsor in advance at the beginning of each quarter. Certain recordkeepers require CapSouth to bill in arrears and/or on a monthly basis. Plan sponsors may elect to have the fee taken out of the assets of the plan by the record keeper, or the plan sponsor may pay the fee themselves. To have fees deducted from the plan it must be approved in writing by the client and a copy of the invoice will be sent to the Plan Sponsor and to the record keeper. For Institutional clients in a Pooled Employer Plan (PEP), CapSouth invoices the participating employer/client in arrears at the beginning of each quarter. Participating employers may elect to have the fee taken out of the assets of the plan by the record keeper, or the participating employer may pay the fee themselves. To have fees deducted from the plan it must be approved in writing by the participating employer and a copy of the invoice will be sent to the participating employer and to the record keeper. Individual Consulting Fees For clients paying a flat fee, all the fee or a portion of the fee may be invoiced in advance; amounts not invoiced in advance will be invoiced at time periods and amounts specified in the consulting agreement. Hourly clients are billed monthly or quarterly in arrears at the beginning of each month or quarter; an estimated fee may be charged in advance. 5.C – Other Fees Paid by Clients ‐ Managers also impose minimum investment Manager costs, the ‐ ‐ Sub-Manager Fees Manager, the client is assessed an additional When CapSouth refers client assets to a Sub cost. The Sub Manager fees will be paid directly from the client account. The fee is based ‐ on a percent of the client’s assets and typically ranges from 0.10% to 0.75%, depending on the manager and services provided. Sub requirements. The minimum amounts vary. In addition to Sub investment vehicles that client assets are invested in may have their own associated cost. For instance, costs are charged to shareholders of mutual funds and exchange traded funds by the fund manager and deducted directly from the net asset value of the investment vehicle. - 18 -  Mutual Fund Fees, Exchange Traded Fund (ETF) Fees, Closed End Fund Fees and Similar Investment Vehicle Fees Investment advisory services are separate and distinct from fees and expenses charged by mutual funds, ETFs, ETNs, closed end funds and other similar investment vehicles. The fees charged to the client for these types of investment vehicles are described in the prospectus or similar documents of the fund. Fees will generally include management fees, other fund expenses and may include distribution fees. We encourage our clients to review any prospectus or similar document carefully. Clients can invest in certain funds directly, without the service of CapSouth. Custodial & Trading Fees Custodians generally charge transaction fees on purchases or sales of mutual funds, stocks, bonds, exchange traded funds and notes, and options. In some cases, custodians also charge an annual custody fee. Fees for trading & custody are disclosed to the clients prior to the client opening an account with a custodian. Please see the Item 12 below for more information. Trust Administration For assets held in a trust, the trustee often charges trust administration fees on trusts for which they are acting as the sole corporate trustee or as a co-trustee. These fees vary by trustee and can be flat fee, a percentage fee of the assets in the trust, or a combination of both methods. 5.D – Prepayment of Fees Investment Management & Planning Services Fees If the advisory contract is terminated during a quarter, the client will receive a pro-rated refund for the fee paid during the quarter the contract was terminated. Clients should terminate their contract in writing. The refund will be normally be received as a credit to the client’s account or, if the account has been closed, the client will receive a reimbursement check. Stand Alone Planning Services Fees Ongoing Planning Services: For clients paying these fees in advance, if the planning contract is terminated during a quarter, the client will receive a pro-rated refund for the fee paid during the quarter the contract was terminated. Clients should terminate their contract in writing. The refund will be received as a reimbursement check. Clients who pay hourly planning fees may be entitled to a refund if they prepay an estimated cost. This would occur when the total fee for hours actually worked in association with the planning engagement is less than the prepaid estimated cost. In such cases, the refunded amount would equal the prepaid amount less the fees for actual hours worked. The refund will be received as a reimbursement check. One Time Planning Service: For clients paying a flat fee or a percent of assets, if the agreement is terminated prior to CapSouth completing agreed upon services, 50% of the agreed upon total fee will be refunded to client; if CapSouth has completed agreed upon services, no refund will be paid to client. Clients who pay hourly planning fees may be entitled to a refund if they prepay an estimated cost. This would occur when the total fee for hours actually worked in association with the planning engagement is less than the prepaid estimated cost. In such cases, the refunded amount would equal the prepaid amount less the fees for actual hours worked. No matter the method for calculating fees, any refund - 19 -  will be received as a reimbursement check, and clients should terminate their contract in writing. Institutional Consulting Fees If the consulting contract is terminated during a quarter and fees were paid in advance, the client will receive a pro-rated refund for the fee paid during the quarter the contract was terminated. Clients should terminate their contract in writing. If the plan sponsor pays our fees, the refund will be received as a reimbursement check to the plan sponsor. If our fees are paid from plan assets, we will work with the recordkeeper to reimburse the plan. Individual Consulting Fees If the consulting contract is terminated during a quarter, the client will receive a pro-rated refund for the fee paid during the quarter the contract was terminated. Clients should terminate their contract in writing. The refund will be received as a reimbursement check. Clients who pay hourly consulting fees may be entitled to a refund if they prepay an estimated cost. This would occur when the total fee for hours actually worked in association with the consulting engagement is less than the prepaid estimated cost. In such cases, the refunded amount would equal the prepaid amount less the fees for actual hours worked. The refund will be received as a reimbursement check. 5.E – Compensation for Product Sales CapSouth employees receive no compensation, fees, commissions or similar benefits from the sale of mutual funds to individual clients or from mutual funds being placed as an investment option in a corporate retirement plan. Some employees of CapSouth are licensed insurance agents and can recommend that a client purchase an insurance or annuity product. Clients are under no obligation to purchase these products through CapSouth employees. If a client does decide to purchase an insurance or annuity product recommended by a CapSouth employee, the client should be aware that the employee and the firm may receive additional compensation in the form of commissions. It is our goal at all times to put the interest of the client first; however, clients should be aware that the receipt of additional compensation itself creates a conflict of interest and can affect the judgment of these individuals when making recommendations. CapSouth utilizes insurance and annuity disclosure forms that present product information and disclose the conflict of interest inherent in the client purchase of such products through CapSouth. An advisor will review this form with the client and have the client sign the form prior to the placement of an insurance or annuity product. Clients always have the option to purchase insurance & annuity products that we recommend through other brokers or agents that are not affiliated with CapSouth. Sometimes these products may be purchased at a lower cost than they would be through CapSouth. - 20 -  Item 6 - Performance Based Fees CapSouth does not charge or participate in any type of performance based fees. Item 7 - Types of Investment Advice Clients CapSouth generally provides investment advice to individuals, trusts, corporations (both for profit and non-profit), and to corporate retirement plans. A minimum of $250,000 of assets under management is generally required for an individual, trust or corporation to open a relationship with CapSouth. These minimums are negotiable at the discretion of a CapSouth investment advisor representative. Should a client fall below these minimum levels, CapSouth may opt to resign as the advisor. CapSouth has no minimum size limits for corporate retirement plans. Item 8 - Methods of Analysis, Inv. Strategies and Risk of Loss 8.A - Methods of Analysis In evaluating equities, we primarily use fundamental analysis. The main sources of our information are Morningstar, company websites, and financial websites. We primarily take a long term approach to investing and maintain diversified accounts and investment strategies. Mutual funds, ETFs (exchange traded funds) and closed end funds are selected by screening for funds that meet certain criteria. We look at manager tenure, past performance, risk levels, expenses, investment philosophy, etc. The main sources of our information are Morningstar, Fi360, and fund company websites. CapSouth may also recommend the use of a Sub-Manager for client accounts. Sub- Manager strategies are evaluated based upon manager tenure, past performance, risk levels, expenses, investment philosophy, etc. The main source of information regarding the strategies of Sub-Managers is normally information provided by the Sub-Manager. CapSouth will not, in most cases, be able to verify the accuracy of such information. Our investment analysis methods rely on the assumption that the companies whose securities we purchase and sell, the rating agencies that review these securities, and other publicly available sources of information about these securities, are providing accurate and unbiased data. While we are alert to indications that data may be incorrect, there is always a risk that our analysis may be compromised by inaccurate or misleading information. Risk of Loss All investment programs have certain risks. CapSouth manages portfolios with a goal of obtaining an appropriate rate of return for the amount of risk taken. The following risks, and others, may be associated with the investments and strategies we utilize: loss of principal, interest rate risk, market risk, inflation risk, currency risk, reinvestment risk, liquidity risk, credit risk, counterparty risk, financial risk and emerging markets risks - 21 -  including, but not limited to, political risk, less developed and/or efficient trading markets, differing accounting and legal standards, etc. Securities investments are not guaranteed, and client investments may lose value. 8.B - Investment Strategies CapSouth’s general investment strategy is to attempt to reduce risk and volatility by building diversified portfolios in a manner consistent with the tenets of modern portfolio theory. While mutual funds, exchange traded funds, closed end funds, stocks and bonds are the primary investment vehicles used in or recommended for client accounts, we may also use or recommend various other investment vehicles in the implementation of our strategies, including private securities and derivatives. Investment strategies managed by CapSouth typically employ long-term trading (securities held for at least one year) with periodic allocation changes based upon our analysis of the economy and the markets. Our general investment philosophy and approach to managing investment strategies is consistent with a “buy-and-hold” strategy which results in long- term trading. However, we will also employ short-term trading strategies (securities held for less than one year) and options strategies (generally selling covered calls or purchasing calls) as appropriate to a client’s situation; these strategies typically result in higher turnover and shorter holdings periods. CapSouth will also engage in short-term trading due to the need to rebalance portfolios, sell certain assets brought to CapSouth by new clients or transfers of new assets by existing clients, or for other reasons which arise in the course of managing unique client circumstances. Other investment strategies are available through the use of Sub-Managers. These include but are not limited to strategies designed with a primary focus of reducing taxes, reducing investment costs, reducing volatility, or outperforming an appropriate index. CapSouth will often invest a portion or all client assets in investment strategies offered by a Sub-Manager, subject to the Client’s investment objectives and risk tolerance. In selecting Sub-Managers, CapSouth will perform reasonable due diligence to determine if we believe a strategy offered by the Sub-Manager is appropriate to utilize. 8.C – Primary Security Types Utilized by CapSouth CapSouth primarily utilizes mutual funds, exchange traded funds (ETFs), closed end funds, equities, cash and cash equivalents in the investment management of client assets. Capsouth occasionally utilizes options and private equity funds in the investment management of client assets. The mutual funds, ETFs and closed end funds that we utilize are almost entirely diversified funds or funds that hold many holdings. However, most funds we utilize tend to focus on a particular area of the market (Ex – US large cap growth, mortgage backed bonds, emerging market stocks, etc.); this leads to risks that the given area or sector of the market may underperform the broader stock or bond market. Many of the funds we utilize are considered active funds, or funds that seek to outperform a given index. Active funds tend to have higher expenses and be less tax efficient. There is also no guarantee that active funds can outperform the index, and there is the possibility they may lag an appropriate - 22 -  index, sometimes by a significant amount. Active funds often rely heavily on the expertise of the management team or single manager in seeking to meet their objectives; changes in the management of these funds could adversely affect these funds. ETFs and closed end funds that are thinly traded or have a low average trading volume have additional potential risks in that they may have high price spreads so that frequent trading could have a significant impact on returns. Item 9 - Disciplinary Information 9.A – Criminal or Civil Actions CapSouth has no items to report. 9.B – SEC or Regulatory Agency Proceedings CapSouth has no items to report. 9.C – Self-Regulatory Organization (SRO) Proceedings CapSouth has no items to report. Item 10 - Other Financial Industry Activities & Affiliations 10.A – Broker Dealer or Register Representative Registrations CapSouth is not registered as a broker-dealer nor has any application pending to register as one. No CapSouth employees are registered as broker-dealer representatives, and no employees have pending applications to register as one. 10.B – Futures and/or Commodities Registration Neither CapSouth nor any of its employees are registered as a futures commission merchant, a commodity pool operator, a commodity trading adviser, or an associated person of the foregoing entities. There are no pending registration applications that would change this. 10.C – Relationships Material to Advisory Business Some related persons of CapSouth are also insurance agents for insurance companies. In this capacity individuals can receive revenue from the sale of insurance and annuity products. These related persons can sell insurance products to CapSouth clients and non- clients. It is our goal at all times to put the interest of the client first; however, clients should be aware that the receipt of additional compensation itself creates a conflict of interest and can affect the judgment of these individuals when making recommendations. Clients are under no obligation to purchase these products through CapSouth employees. CapSouth discloses this conflict of interest to clients. See Item 5.E above for more information. - 23 -  10.D – Recommendation of Other Investment Advisors or Other Types of Professionals and Associated Conflicts of Interest Capsouth will at times recommend clients use certain legal or tax professionals based on the client’s needs, however we do not receive any separate compensation for these referrals and have no agreement in place with any such professional by which they provide referrals back to CapSouth. BlackRock The development and maintenance of some CapSouth investment strategies is materially supported by BlackRock Fund Advisors and/or its affiliates, including BlackRock Investments, LLC (collectively, “BlackRock”), which provides CapSouth with investment research, model recommendations and marketing support at no cost. Research and recommendations provided by BlackRock to CapSouth, however, predominantly favor the use of iShares ETFs and Blackrock mutual funds, which are both distributed by BlackRock. While CapSouth is under no obligation to utilize iShares ETFs or Blackrock mutual funds in the management of any CapSouth investment strategies, the strategies for which Blackrock provides material support will predominantly and sometimes exclusively utilize iShares ETFs and Blackrock mutual funds in their construction. If CapSouth does not realize and maintain a threshold level of assets in the strategies supported by BlackRock, BlackRock may charge CapSouth a fee in the future for their support. These facts create a material conflict of interest for CapSouth as the receipt of such services from BlackRock reduces CapSouth operating costs, which creates an incentive for CapSouth to recommend and utilize products sponsored or distributed by BlackRock in the management of all client accounts. To address this conflict, if the client does not want to invest their assets in a CapSouth investment strategy supported by Blackrock, the client may discuss alternative investment strategies that CapSouth has available. Item 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading 11.A - Code of Ethics CapSouth has a Code of Ethics in place. This Code of Ethics is reviewed on an annual basis for any necessary revisions and signed and acknowledged by supervised persons on an annual basis. Our Code of Ethics outlines the established rules of conduct for all CapSouth supervised persons. It is designed to govern personal securities trading for supervised persons, the acceptance and delivery of gifts and entertainment from or to clients and prospects, the protection of client information, and our fiduciary duty to our clients among other things. Clients may request a copy of our Code of Ethics by emailing Marshall Bolden at mbolden@capsouthwm.com or by calling 334-673-8600. 11. B – Investment Recommendations Involving Securities in which CapSouth or its Employees have a Material Financial Interest CapSouth does not engage in principal trading, does not act as a general partner in any partnership in which it solicits client participation, and does not act as an investment - 24 -  advisor to any investment company. CapSouth does not recommend securities to clients in which it has a proprietary or ownership interest. 11. C - Participation or Interest in Securities Held by Clients Supervised persons of CapSouth may buy or sell securities that are also held by clients or recommended to clients. This creates a potential conflict of interest in that a supervised person could purchase the same security as the client at a similar time or could trade ahead of a client (front run a client). See 11.D directly below for more information as to how CapSouth attempts to prevent this from occurring. 11. D – Employee Trading in Securities Traded by Clients or Recommended to Clients Supervised persons may not knowingly enter trades for a security in their own personal account before entering trades for the same security in client accounts on the same day. Supervised person’s trades, unless preapproved by the compliance department, should be placed after 2:30pm Central Time, or within 30 minutes of the closing of securities markets, to minimize the risk of accidentally frontrunning a client trade. Marshall Bolden (Chief Compliance Officer) reviews all trades with special attention being paid to the trades of supervised persons and members of their household. Marshall’s personal trades are reviewed by another member of CapSouth’s compliance or management team. If a supervised person has a financial interest in a security or the issuer of a security recommended to a client, this interest must be disclosed to the client per our Code of Ethics. Item 12 - Brokerage Practices 12.A - Selecting Broker-Dealers/Custodians CapSouth does not serve as the custodian of client assets that we manage although we may be deemed to have custody of client assets if a client gives us authority to withdraw our fee from their account (see Custody, below). Client assets must be maintained in an account at a “qualified custodian”, generally a broker dealer or bank. In order for CapSouth to directly transact business on behalf of our clients, accounts must be held at Charles Schwab & Co., Inc. We are independently owned and operated and are not affiliated with Charles Schwab. The custodian will hold client assets in a brokerage account and buy and sell securities when we or the client instruct them to do so. CapSouth uses Charles Schwab for custody services. Client will open an account by entering into an account agreement with the custodian. We do not open accounts for clients, although we will assist clients in doing so. If a client does not wish to custody an account with Charles Schwab, CapSouth likely will not be able to directly manage the account. When selecting custodians/broker dealers to recommend to clients we consider a wide range of factors, including among others: ● Combination of transaction execution services and asset custody services - 25 -  ● ● ● ● ● ● ● Capability to execute, clear, and settle trades (buy and sell securities for your account) Capability to facilitate transfers and payments to and from accounts (wire transfers, check requests, etc.) Availability of investment products (stocks, bonds, mutual funds, exchange traded funds, etc.) Quality of services Competitiveness of the prices of services and the willingness to negotiate the prices Reputation, financial strength, and stability Prior service to us and our customers 12.A.i - Soft Dollars CapSouth endeavors to act in each of its client’s best interest. However, CapSouth’s requirement that clients maintain assets in accounts at Charles Schwab may be based in part on the benefit to CapSouth of the availability of products and services provided by the custodian to CapSouth and not solely on the nature, cost or quality of custody and brokerage services provided, which may create a potential conflict of interest. Charles Schwab Schwab Advisor Services™ is Schwab’s business serving independent investment advisory firms like us. Through Schwab Advisor Services, CS&Co. provides us and our clients with access to its institutional brokerage services— trading, custody, reporting, and related services—many of which are not typically available to CS&Co. retail customers. However, certain retail customers may be able to get institutional brokerage services from Schwab without going through us. CS&Co. also makes available various support services. Some of those services help us manage or administer our clients’ accounts, while others help us manage and grow our business. CS&Co.’s support services described below are generally available on an unsolicited basis (we don’t have to request them) and at no charge to us. The availability to us of CS&Co.’s products and services is not based on us giving particular investment advice, such as buying particular securities for our clients. Here is a more detailed description of CS&Co.’s support services: CS&Co.’s institutional brokerage services include access to a broad range of investment products, execution of securities transactions, and custody of client assets. The investment products available through Schwab include some to which we might not otherwise have access or that would require a significantly higher minimum initial investment by our clients. CS&Co.’s services described in this paragraph generally benefit the client and the client’s account. CS&Co. also makes available to us other products and services that benefit us but do not directly benefit the client or its account. These products and services assist us in managing and administering our clients’ accounts and operating our firm. They include investment research, both Schwab’s own and that of third parties. We use this research to service all or some substantial number of our clients’ accounts, including accounts not maintained at CS&Co. In addition to investment research, CS&Co. also makes available software and other technology that: • provide access to client account data (such as duplicate trade confirmations and account statements); - 26 -  • facilitate trade execution and allocate aggregated trade orders for multiple client accounts; • provide pricing and other market data; • facilitate payment of our fees from our clients’ accounts; and • assist with back-office functions, recordkeeping, and client reporting. CS&Co. also offers other services intended to help us manage and further develop our business enterprise. These services include: • educational conferences and events; • technology and business consulting; • consulting on legal and related compliance needs; • publications and conferences on practice management and business succession; and • access to employee benefits providers, human capital consultants, and insurance providers. CS&Co. provides some of these services itself. In other cases, it will arrange for third-party vendors to provide the services to us. CS&Co. also discounts or waives its fees for some of these services or pays all or a part of a third party’s fees. If you did not maintain your account with Schwab, we would be required to pay for these services from our own resources. The availability of services from CS&Co. benefits us because we do not have to produce or purchase them. We don’t have to pay for these services, and they are not contingent upon us committing any specific amount of business to CS&Co. in trading commissions or assets in custody. With respect to the Program, we do not pay SPT fees for the Platform so long as we maintain client assets in accounts at CS&Co. The fact that we receive these benefits from Schwab is an incentive for us to recommend the use of Schwab rather than making such a decision based exclusively on your interest in receiving the best value in custody services and the most favorable execution of transactions. This is a conflict of interest. We believe, however, that taken in the aggregate our recommendation of CS&Co. as custodian and broker is in the best interests of our clients. It is primarily supported by the scope, quality, and price of CS&Co.’s services and not Schwab’s services that benefit only us. 12.A.ii - Brokerage for Client Referrals Neither CapSouth nor any related person of CapSouth receives referrals from a broker- dealer or third party. 12.A.iii - Directed Brokerage CapSouth does not offer directed brokerage. Clients have the option to determine if they would like their accounts held with Charles Schwab. We will provide the client with information on the custodian/broker dealer however the client has the final decision on where to maintain their account. If a client would like to have their trades executed through another broker, we will generally not be able to directly manage the account (enter trades, make requests on your behalf, etc). - 27 -  12.B – Trade Aggregation CapSouth does not consider aggregating trades in its normal day to day activities due to the low volume of trades that we enter most days. However, when we are rebalancing or changing the allocations of any of our investment strategies in which multiple accounts are invested, we do consider aggregating trades. For securities that are not thinly traded or that have higher average trading volumes, the size of the trades we enter usually has little to no market impact. Aggregation is generally not used for trades in such securities. This has the potential result of clients receiving execution prices that are slightly different. For securities that are thinly traded, or have a low average trading volume, we may aggregate trades in an attempt to receive a better execution price and so that each client receives the same execution price. Item 13 - Review of Accounts 13.A - Periodic Reviews Account Review Meetings: the frequency of this type of review is determined on a client by client basis. Based upon the client preferences and situation we will target quarterly, semi-annual or annual review meetings. The frequency of meetings is not contractual. These meetings usually cover topics that include: changes to the client’s financial situation, goal changes, Guidance plan status, performance reviews, investment reviews and recommendations, cash flow monitoring, risk tolerance, market discussion, etc. For Guidance and Wealth Management clients at least one meeting every two to three years will be used to update their Guidance or Wealth Management Plan. Account Reviews, Guidance Reviews and Wealth Management reviews are performed by a investment advisory representative of CapSouth. 13.B - Review Triggers Account reviews may be performed outside of the standard procedures when a client’s investment objectives or life circumstances change or when a client requests a review. 13.C - Regular Reports Performance reports on all billed accounts held at Schwab are prepared on a quarterly basis. At a minimum the reports contain performance information for the quarter and year to date, and market values. Wealth Management clients will usually receive a report related to their Wealth Management Plan every two to three years. This report will normally contain an update of their assets and liabilities, stated goals, various scenarios summarizing the results of their plan and any recommended changes. This report is available as a hard copy or online through the planning program RightCapital (if the report is generated through Rightcapital). The ability to provide these reports is dependent upon the client providing us the information necessary to produce the report. As such, some reports may not contain all the information normally presented in these reports if we have been unable to obtain all pertinent information. - 28 -  Guidance clients will usually receive a report that updates their Guidance Plan every two to three years or more often depending on the client’s situation. This report will normally contain an update of their assets and liabilities, their retirement and education goals, and various scenarios summarizing the results of their plan and any recommended changes. This report is available as a hard copy and generally online through the planning program RightCapital. The ability to provide these reports is dependent upon the client providing us the information necessary to produce the report. As such, some reports may not contain all the information normally presented in these reports if we have been unable to obtain all pertinent information. Custodians of client accounts provide regular account statements directly to the client on a monthly to quarterly basis. The custodian’s periodic statements are considered the official record of account holdings and values, and they supersede any statement or report that CapSouth provides to the client. Item 14 - Client Referrals and Other Compensation 14.A – Benefits Provided to CapSouth from External Sources and Related Conflicts of Interest As detailed in Item 12.A.i above, our custodians make products and services available to us that may not benefit the client in exchange for our use of their custody and brokerage services for client accounts. Examples include: ● ● ● ● ● ● ● ● Facilitate trade execution and allocate aggregated trade orders for multiple client accounts Provide pricing and other market data Facilitate payment of our fees from our clients’ accounts Assist with back-office functions, recordkeeping, and client reporting Educational conferences and events Consulting on technology, compliance, legal, and business needs Publications and conferences on practice management and business succession Access to employee benefits providers, human capital consultants, and insurance providers. Clients should be aware that the receipt of these benefits creates a conflict of interest; CapSouth would not receive these benefits or would have to pay for them if we did not place client assets with our custodians. Clients can direct CapSouth to custody their account(s) at any custodian we currently utilize. If, due to this conflict of interest or for any other reason, a client or potential client requests to utilize a custodian we do not have a custodial relationship with and still have CapSouth provide planning and/or investment services, we will consider such requests, but acceptance will be at our sole discretion. 14.B - Incoming Referrals/Endorsements CapSouth is pleased to accept referrals from clients, attorneys, accountants, friends or other sources. CapSouth currently has no relationship or arrangement through which we pay for referrals. - 29 -  14.C - Referrals to Other Professionals CapSouth does not accept any referral fees from other professionals when we refer a prospect or a client to them. Item 15 - Custody For accounts held at Charles Schwab, under government regulations, we are deemed to have custody of client assets when clients authorize us to instruct the custodian to deduct our advisory fees directly from a client account held at the custodian. Charles Schwab will maintain actual custody of client assets. We will prepare quarterly performance reports for billed accounts for which we provide investment management services, and we will prepare period reports for planning clients that relate to their Guidance or estate plan, net worth, assets & liabilities, etc. We urge you to compare these reports that CapSouth provides with the periodic account statements that you receive from your qualified custodian. Reports related to our planning services may contain bank account balances, liability information, real estate values and other financial data. This information is obtained from the client or through a direct link that the client has established between their institution and Tamarac Reporting or RightCapital. Some of these assets may be hard to value, and we will rely on the client to confirm this information. This type of information is used in long range planning for the client. Clients are urged to confirm this information periodically. CapSouth does not accept client login credentials to obtain any such information. Item 16 - Investment Discretion Discretionary Authority for Trading CapSouth accepts discretionary authority to manage securities accounts on the behalf of clients. We use discretion in determining the securities to be bought and sold, the quantity to be bought and sold, and the timing of the transactions. Discretion means we can act on your behalf without your approval for each transaction. Discretionary trading allows us to efficiently process trades in client accounts once changes in portfolios have been approved. In securities accounts for which CapSouth has discretion, discretionary authority is also granted to CapSouth to utilize sub-managers in accounts for which CapSouth has discretion; this provides CapSouth the authorization to hire & fire sub-managers and to select specific investment strategies to be utilized in accounts. When a sub-manager is utilized in a client account, CapSouth has no authority to determine the specific securities that are bought, sold, or held in the client account. If discretionary authority has not been given to us by the client, we will obtain the client’s approval prior to each transaction. Clients receive confirmations of all trades from the account custodian, whether the account is managed solely by CapSouth or if a sub-manager is utilized. Clients may call to discuss the transactions with us at any time. - 30 -  A client may provide investment restrictions if they prefer. CapSouth’s advisory agreement provides a section in which the client can specify specific securities or sub-managers they want to restrict. Sub-managers that CapSouth utilizes will generally accept limited security restrictions. If a sub-manager cannot or will not accept security restrictions requested by a client, CapSouth will notify the client and discuss alternatives. A client may choose to restrict use of any sub-manager that cannot or will not accept the client’s security restrictions. Discretionary Authorization In order for CapSouth to have discretionary authority over a client’s account the client must sign an agreement giving CapSouth this authority. This agreement must be then approved by an Investment Advisor Representative. Each custodian also requires a client signature giving the Advisor trading authorization over their account. This is usually done at the time the account is opened using account applications. Item 17 - Voting Client Securities CapSouth does not accept the authority to vote proxies on behalf of its clients. Clients will receive proxies or other solicitations directly from the custodian or transfer agent, not from CapSouth. If a client has a specific question relating to voting on securities and would like to discuss it with an Investment Advisor Representative, they may do so. Item 18 - Financial Information 18.A – Balance Sheet Since we do not require prepayment of more than $1,200 in fees per client, six months or more in advance, a balance sheet is not required to be provided. 18.B - Financial Condition Likely to Impair CapSouth’s Ability to Meet Client Commitments CapSouth does not have any financial condition that is reasonably likely to preclude us from meeting our contractual commitments to our clients. 18.C – Bankruptcy Petitions in Last 10 Years CapSouth has no items to report. - 31 -