After searching for a member the 4 links are there Edit, Delete, Permissions User Groups, I click on user group and create it, no problem at that part.
The problem is AT edit user page, when I try to assign a member to one of the new groups I created "Clients" it is not available from the drop down menu, all that shows in the drop down box is the default groups Administrators" , "Registered Users" and Registered Users (not validated).
If I go back and select User Groups from the main ACP the new user group is there, it just seems I can't assign anyone to it.