In order to create the groups, follow this link to create them in ACT! first. https://youtu.be/nxciYQzz1BE.

Once the groups are created in ACT!, go to Handheld Contact on the computer/server and click on the Contacts Info option on the left.

Choose Change and then select the custom groups created.

Note: If the new groups are not listed, you must have had Handheld Contact open. Close Handheld Contact, and reopen the application.