Keri Kutakoff to lead
strategic initiatives to further scale and grow the firm’s advisor offerings
NJ, April 25, 2022 – Fountainhead is pleased to announce Keri Kutakoff has been
appointed to fulfill the new role of Chief Operating Officer (COO) of the firm.
A veteran financial executive and experienced business leader, Keri will
oversee continued expansion at both Fountainhead Advisors (“FHA”) and
Fountainhead Asset Management (“FAM”). Her responsibilities will include optimizing
advisor practices inclusive of scaling client acquisition, increasing client
engagement, navigating business succession and transition, and integrating the
differentiated services offered through Fountainhead Asset Management. The
result will be an enhanced and differentiated client and advisor offering that
aligns with Fountainhead’s value proposition.
“Keri is a significant
addition to our fast-growing team. We are excited to have her onboard,” said
Joe Halpern, Chief Investment Officer of Fountainhead. “Keri will ensure that
advisors are able to continuously differentiate and scale their practices
through maximizing all that Fountainhead has to offer.”
Keri brings with her
over 20 years of industry experience focused on developing platforms and solutions
that have resulted in expanded revenue and growth for advisor practices. She
began her career with Oppenheimer & Co. Inc., where she managed the firm’s
Separate Account Investment Management Program. After the firm was acquired by
CIBC Wood Gundy, she was a central leader of the design and execution of the
separate account program throughout Canada’s Wood Gundy salesforce.
acquisition of Oppenheimer by Fahnestock, Keri joined Bear Stearns as a
Managing Director tasked with developing their sub-advisory and separate
account programs. With a strategic vision of the platform, she served as a senior
liaison across multiple business lines, including operations and marketing.
Since 2015, Keri has
served as a Managing Director with Penn Mutual. In this most recent role she
has specialized in practice management, providing coaching and development to
help advisors optimize their practice across business operations and
development, client acquisition and engagement and business succession and
“We are very excited to welcome Keri to the
Fountainhead Team and leverage her experience in developing solutions-based
strategies for advisors and clients,” said Marc Rock, Managing Partner of
Fountainhead. “We will look to Keri to bolster strategic relationships,
streamline practice efficiency, and continue to strengthen the marketing
platforms of both FHA and FAM.”
As part of Fountainhead’s
commitment to understanding the customized stories and backgrounds of both FHA
clients and FAM advisors, Keri will ensure both sides of the business are run
with maximum efficiency and expertise. Her long history in business operations
and unique track record of successfully delivering innovative solutions for
advisors will be leveraged.
Keri earned her
undergraduate degree in Business Administration from the University of
Delaware. In addition to Life and Health Licenses, she holds FINRA
registrations 7, 63, 65 and 24. She earned her Chartered Institute of
Management Accountants designation (CIMA) in 1998. She is currently a candidate
to earn her Chartered Financial Consultant (ChFC) designation with the American
College of Financial Services. In 2019, Keri was privileged to assume the role
as President of the NY/NJ Women in Insurance and Financial Services (WIFS)
Keri resides in
Bernardsville, New Jersey with her three children, Samantha, Justin, and Josh.
She is an active member of her local school community and enjoys spending her
free time cycling and reading.
About Fountainhead Advisors
Fountainhead Advisors is
an independent SEC Registered Investment Advisory (RIA) firm providing
comprehensive, holistic financial planning to high-net-worth individuals and
business owners worldwide. Fountainhead believes every client’s financial life
is as distinct as they are and deserves its own customized wealth management solutions.
The depth and breadth of the Fountainhead team lends to their specialist
approach and ability to connect to clients on a human level. The firm’s
collaborative style, combined with state-of-the-art technology, operations, and
service teams, is designed to support the most sophisticated needs of both
clients and advisors. For more information, please visit fountainhead-advisors.com.
Fountainhead Asset Management
Management (FAM) is an Outsourced Chief Investment Office (OCIO) firm serving financial
advisors, RIAs, and accountants. As a thought leader in the field of investing,
FAM provides customized beginning-to-end investment solutions that include comprehensive
case design, rigorous due diligence and investment product selection and
implementation. FAM’s dedicated team of investment specialists stand ready to
support advisors with a suite of research, commentaries, and time-sensitive
market updates and content. By partnering with FAM, advisors are able to design
an institutional quality practice aligned with outsourced C-suite services and
capabilities, thus creating the freedom to grow and scale their own business. For
more information, please visit www.fountainheadam.com.
Contact: Sara Mantz, Marketing firstname.lastname@example.org
In Smokey and the Bandit, Burt Reynolds wins a
challenge by illegally taking alcohol over state lines in a big rig.
It is a fun movie where truckers do as they please – trucking as a low-on-stress,
big-on- adventure ride that leads to a solidly middle-class life. That was in
Fast forward to today and truck drivers are constantly monitored within their cabs. Every single one of the truck drivers from Smokey and the Bandit would have been fired: no seat belts, speeding, doing what they want when they want, and the list goes on. Nowadays, truckers are primarily paid by the mile, which creates obvious material unpaid periods where they are essentially leashed to their rig and monitored for literally everything via cameras and sensors all over their truck. The compensation reward for the truck driver has also declined materially, over the last few decades, with some calculating the reduction up to 50%. It is no longer a middle-class job, when adjusting for inflation.
In 2019, prior to Covid, there was a staggering 90% turnover rate in trucking. Supply chain disruptions, Covid related government assistance, and a seemingly general shift in the way many are viewing their life-work relationship has amplified a shortage already in the making in long haul truckers. These influences have resulted in wage inflation not unlike that highlighted in chicken processing plants in our December 2021 Explorations. Recent headlines have Walmart offering $110,000 to lure truckers, though that presumably may be a teaser rate given some of the wage dynamics we have seen.
Will truckers’ pay revert to one necessary for a solidly
middle-class lifestyle? NO!
“What if we can create a virtual driver who never drinks, never texts, and never gets tired?” is the second line of TuSimple’s Autonomous Trucking opening video. TuSimple began operating heavy-duty trucks autonomously over an 80 mile “hub-to-hub” stretch between Tucson and Phoenix this past December in a series of test runs. It is reasonable to draw the conclusion that if wages continue to increase, then funding of autonomous trucking will increase as well – it is a supply / demand equation. Autonomous driving would result in roughly 500,000 jobs lost in the US alone.
It is worth noting that not only does this technological innovation (autonomous driving and all the tech that comes with it), lead to significant job loss, but also increased energy efficiency, as well as consistency and speed of delivery. Additionally, there is the hopeful safety benefits of robot vs. driver – large trucks were responsible for 10% of fatal crashes in the US in 2019.
Recent wage inflation is but a component of recent
heightened inflation. Following, we will broaden out our analysis to attempt to
answer the following questions:
Why was inflation not present over the last 35+ years?
Why do we have it now?
How does today’s environment compare and contrast to the late ‘70s?
How does Russia’s invasion of Ukraine play into inflation?
What role does innovation play in the conversation about inflation?
Why Was Inflation Not Present Over the Last 35+ Years?
There has been a multi-decade decline in real interest rates
within the developed world that has primarily been due to the combination of
aging demographics, increasing debt loads and massive innovation encompassing
technology maintaining a lid on inflation. Globalization has also been a
contributor to lower inflation simply by increasing the level of competition
and the areas to which to source product.
As a population ages, there are a number of population characteristics
that shift, leading to lower growth and inflation:
Fewer workers: The proportion of workers
to population declines as a larger percentage of the population is in or
approaching retirement age. One can see this somewhat reflected in the US Labor
Force Participation Rate which has been in decline since the early 1990s. It is
only somewhat reflective in that other trends are in play, such as more women included
in the labor force and increasingly older people remaining in the work force.
Nevertheless, the current trend means fewer people earning income and spending
More savings: Older populations tend to
save more as they approach retirement. It has been estimated that there will be
a 25% increase in net worth per person in the US by the middle of the century
simply due to population aging according to The Pew Charitable Trust.
This is capital that is not getting back into the economy.
Less spend: Older populations also spend
less. The Bureau of Labor Statistics calculates that the average retired
household spends 25% less than the average working household.
High government debt levels exacerbate the above
characteristics, as more dollars go towards debt vs investment. This feels
counterintuitive. Increasing debt, especially at lower interest rates, should
create a supply / demand mismatch – meaning fewer market participants
interested in buying from a counterpart that is (1) increasing debt and (2)
lowering interest payments. However, aging populations save more, institutions
are forced via regulations to hold government debt, and ultimately, the Fed can
use their balance sheet to vacuum up any slack. The Fed has been doing exactly
that aggressively over the last decade-plus due to a lack of growth and desire
to generally support capital markets. For the US, we have the added benefit of
being a reserve currency, which attracts even more capital to our debt. With
low growth and low inflation, the yields necessary to meet investor demands
also remained low. The flip side is that this same high debt is deflationary,
as less capital goes towards public and private investments.
One simply needs to look at Japan and Europe, both ahead of
us in terms of aging demographics and debt to GDP levels to note the above effects.
Japan’s debt to equity ratio is 2.5: 1, while Europe is 1.5:1 as compared to
current US levels of around 1:1 – they both had negative real yields prior to
Innovation is the ultimate deflator though. Innovation comes through creation of new products and services as well as methods to increase efficiencies. Innovation can be the result of seismic introductions to an industry, or it can be the culmination of a multitude of small progressions. The Shale Revolution is an example of a single new innovation that catapulted the US to a lead global energy position. General increases in miles-per-gallon , on the other hand, is due to many little innovations (and some big ones, such as Tesla!) over time to eke out the number of miles we can drive per gallon as an example of increased efficiencies.
So Why is Inflation Now Seemingly Out of Control?
We have written about this previously so we will keep it short (May 2021 Market Commentary). Ultimately though, Covid shut down the economy temporarily. This was a massive deflationary event. The government quickly provided massive fiscal stimulus to its citizens. This was a massive inflationary event. Typically, supply and demand move together through recessions and recoveries. This time around, though, it was harder for supply to get back online. There were a variety of reasons, but a big one was Covid-related supply chain issues. It was also harder for supply to figure out new consumer trends (e.g., good vs services) due to Covid. Note the theme? A huge disruption due to a once in a century event creates a million ripples throughout the world.
While these events may feel like “once in a lifetime,” every
time it seems like there is the potential for inflation to start declining,
another event exacerbates it:
China’s Zero-Covid policy: China
continues to shut down areas where there is even a single case of Covid – an
extremely hard task given the dramatically increase contagion of Omicrom
relative to earlier variants and viruses in general. This results in supply
chains shutting down (e.g., trucking, shipping) which results in inflationary
Russian aggressions in Ukraine: as
explained further below, Russia and Ukraine are significant energy and food
contributors to the world.
It has proven to be quite sticky – or at least less
transitory then was initially believed (though transitory was never given a
time frame). Are we in a new paradigm or is it simply an extended temporary
bout of inflation we are dealing with here? Read on!
So, Are We Now in the Stagflation ‘70s?
No! America looked very different back then as compared to
now in many ways. Even when it comes to energy, where one can make a case for
similarities in geopolitical events creating an energy crisis (e.g., equating
the OPEC Oil Embargo to Russian aggressions in Ukraine), our reliance and
production of energy is materially different now then back then. The following
roadmap speaks to why inflation has been low over the last 35+ years:
Demographic Young Older
Gov. Debt Low High
Employment Low High
Furthermore, when looking at both energy production and energy
intensity (note Energy Sidebar), the two periods of time do not even compare.
In fact, renewables and conservation efforts got a real start due to the two oil
crises of the ‘70s.
It is a classic example of disruption leading to innovation.
Petroleum products, which are created from crude oil and
other energy sources (e.g., coal, natural gas and biomass) go into everything.
Beyond fuel, heating oil, and electricity, petroleum is used in asphalt,
plastics, and synthetic materials that are in nearly everything we use.
Energy Intensity measures the units of energy used
per unit of Gross Domestic Product (GDP). It measures how much energy a society
(or group) uses relative to their economic output. Energy efficiency is a major
contributing factor, but there are others, such as more of a population moving
to areas with relatively more moderate temperature, reducing heating/cooling
costs (e.g., the general US migration west).
Energy intensity has dropped by half over the last 35 years
and by roughly 70% over the last 70 years. It is a good trend!
Furthermore, individual spend has also declined materially.
The point is that while energy is a significant component of inflation and an
important contributor to the economy, it has declined materially in its
contribution to GDP growth as well as consumer cost.
Energy Transition -> Energy Innovation
Innovation has led to efficiencies in energy use, all while
increasing the overall functionality of product – with the car being a perfect
And while the world has been transitioning towards
renewables, we expect current events in Europe (e.g., Russia) to turbo charge
growth of renewables over the next two decades. Based on a recent interview
with Daniel Yergin, an expert on energy, it takes roughly 10 years to get a wind
turbine functional with eight of those ten years spent on permitting. We
imagine government will figure out a way to speed up the permit stage.
According to Fed chair, Jerome Powell, in his Q&A post
following the Fed March meeting, based on the data the Fed was watching, they
had expectations for inflation to peak in Q1 2022 prior to Russian aggressions
in Ukraine. It is important to note that the Fed may have the most data out
there and many tools at their disposal, but one of those tools is not a crystal
ball. It is an impossible job. So even without further disruptions arising due
to Russian aggressions and China’s presumably misplaced Zero Covid policy, they
may have been wrong. The point here though is that the Fed did believe, based
on the information they were receiving, that inflation was topping out.
Since the beginning of the year, the Fed in general has
become increasingly hawkish. Simply by communicating expected hikes over the
remainder of the year they have succeeded in very quickly increasing interest
rates that most businesses and consumers are already being charged. For
example, the average 30-year mortgage rate has increased to 4.67% as of the end
of March, a 50% increase from a quarter prior and ~70% increase from the
bottom, experienced this past summer.
Furthermore, the Fed has communicated that they will reduce
their balance sheet by roughly $100 billion a month. According to a
conversation with a Prudential portfolio manager, every $500 billion in balance
sheet reduction is similar to a 0.5% Fed fund increase. That means when
combining balance sheet reductions with expected rate hikes, there is over 3%
of yield increases expected!
It is worth noting that while the market is expecting these
hikes in 2022, the bond market is already pricing in almost 4 rate cuts in
2023, expecting this tightening cycle to be aggressive but short.
Does Russian Aggression Spell Doom to Globalization?
We had written in the past of a move to regionalization from
globalization. However, our views, which are largely based on a well-presented
McKinsey report, was due to innovation rather than war. In the following GDP
map, one can see the size of Russia relative to the world – Russia GDP is
slightly bigger than Spain (in 2021 but probably not in 2023) and way smaller
than Italy. It is why it is hard to see China fully siding with Russia even if
they really want to. US based businesses will continue to source product from
China if that is efficient. Globalization has definitely been a tailwind for
lower cost products and therefore a dampener of inflation. We can see this
dampener slow down as geopolitical tensions increase but it is hard to see
China follow too quickly in the path of Russia given the quick reaction the
West had to Russian aggressions, as well as the material and long-lasting
consequences of those actions. China simply has too much to lose in its
partnership with the West. It is also worth noting that China has not been
involved in any sort of real war since 1979, while Putin has been pretty busy fighting
with Russia’s neighbors and allies (notably Syria) since coming to power in
The consequences have been minimal until now.
It All Leads to Innovation!
Disruption leads to innovation. A vaccine was created in a
Then a year was spent testing efficacy and safety. The last major energy crisis
led directly to increased research into renewable energy and other conservation
and efficiency efforts.
Disruption results in disproportionate reward to the solver. This creates, at least in a capitalist world
filled with curious humans, a disproportionate focus on solving the problem.
This results in innovation!
There will now be more capital and more political will
thrown at the problem at hand: at speeding up approvals of renewables while
solving existing technical hurdles, such as storage (e.g., batteries) and
distribution challenges within the energy complex.
Russia and Ukraine are also large exporters of food and food
related materials. Unfortunately, third world countries will suffer real food
scarcity and inflation. In New York City, where I live, I currently source many
herbs in a garden sitting on my counter, with my honey and many vegetables
coming from local rooftops.
Yes, these are first world luxuries, but they point to the massive innovations
that are already rippling across the world.
As mentioned, Russia and Ukraine are key sources of global
energy and food. Global warming has already put pressure on both energy and
So, while we do not believe Putin via Russia did the world any favors, we do
hope it will speed up innovation in both areas for the long-term benefit of
Burt Reynolds actually runs interference in a Trans Am – a bit more aligned
with his brand – but the movie is full of big rigs.
Shale drilling or fracking necessitated horizontal drilling among other huge
innovations in order to extract oil and natural gas from areas once thought
impossible. For more information: Shale Oil
The 1973 Oil Crisis is an interesting one. Syria and Egypt began what is known
as the Yom Kippur war where they surprise attacked Israel during one of the
holiest of Jewish holidays. Russia, as they continue to do now, supplied
weapons prior and through the war to both countries. America, as they continue
to do now, and some of their allies assisted Israel through the war, especially
as Israel requested dire assistance (like Ukraine). America hesitated then came
through. Saudi Arabia and most other oil producing Arab countries were outraged
given their interest in removing Israel from the region and decided to place a
total embargo on the United States and other countries that came to Israel’s
Shock of 1973–74 | Federal Reserve History). The price of gas jumped
Natixis March Macro Webinar Slides show a drop from a 6% – 8% consumer spend on
energy through the ‘70s to a more recent 2% – 4% spend through the end of Feb
2022. We are not at liberty to reshare the slides
Between this fact, the point made above about the lack of real consequences to
any of Putin’s aggressions over the last twenty years, and the more recent
squabbling among the West, it did not seem so crazy for Putin to take the
gambit he did. 20/20 hindsight of course seems to show he was wrong, but based
on the last 20 years and even short-term capitalist reasons for Europe as
opposed to America, it may not have been that crazy a plan. And it seems the
world was as surprised as Putin (if he knows) at the terrible shape his conventional
army is in – rotten throughout! Hopefully this applies to their nuclear complex
as well, and we definitely hope we never get to find out about that one. Where
he was totally off base was in believing the Ukrainians would greet Russia with
open arms. Regardless of his army, the war was unwinnable because the
population would have never ever folded – it is human nature.