27: What is Purposeful Planning and How Can it Benefit Our Family Clients?

0:02
Let’s talk family enterprise explores global ideas, concepts and models that help family enterprise advisors better serve their family clients brought to you by family enterprise Canada. All views Information and opinions expressed during this podcast are solely those of the individuals involved and do not necessarily represent those a family enterprise Canada.

0:27
Hello, and welcome to another episode of The let’s talk family enterprise podcast. My name is Steve Legler. And it’s great to be your host once again Today’s guest is someone I met several years ago and whom I’ve gotten to know quite well ever since because I joined the organization that he founded, and I’ve never looked back. Our guest today is Johnny Warneke, who founded the purposeful planning Institute over a decade ago. John A is a self described recovering estate lawyer who saw too many perfectly drafted documents that ended up causing problems for families in real life. He’s based in Denver, Colorado, which is where I got into the habit of visiting every July for the annual rendezvous conference. Those trips were Kai Bosch these past two summers as we were forced to have run a zoom instead of rendezvous. But my fingers are ramming crossed, that we’ll be able to be back in person in Denver in 2022. We’ve got a lot of ground to cover. So let’s say hi to our guests and kick things off Johnny Warneke. Thanks for joining us today. This is long overdue. Welcome to the let’s talk family enterprise podcast.

1:32
Steve it’s it’s just a delight and a pleasure to be with you. Thank you for this opportunity.

1:38
I want to start with a journalistic technique from my favorite us Cable News host who always went introducing people asks them was there anything in my intro that you’d like to correct or add to that I get everything just right i i penned some things on you there pick some things on your recovering estate lawyer and things like that. Can you differently you want to clarify on all that?

2:03
Oh, I love it. I would just say Steve, I really started out as a tax attorney. And after about six years of a fuller than full dose of tax law. I discovered that really where I drew the most energy was working with entrepreneurs working with with families working with family enterprises, and so I did transition. I never lost my tax proficiency and my tax geekiness but I did transition slowly but intentionally into what we would call wealth transfer. Planning in the US. And maybe in Canada, you might think of it as trust in a state work that is centered around family enterprise. Okay.

2:50
And so you we’re working with the same kind of clients that most of our audience is working with. So our audience is typically the FTAs, the family enterprise advisors who have gone through the program here. There’s over 400 of us already now. So we’re developing some critical mass. And we’re all about collaborating together and working on more than just the financial aspects that the families have that part of their wealth. When you you know, you name your group, the purposeful planning Institute. Is that what you meant by purposeful or what did you mean or how hard was it to land on the word purposeful as your moniker?

3:31
Well, you know, it’s that’s an interesting question. Steve, when I first began to ISIS suspect that you refer to those 400 FTAs. And I do think that’s critical mass. It would be for the US it certainly is for Canada. It’s a tremendous accomplishment and to think that it’s all happened in less than two decades is pretty astounding. But when I think about those individuals, and you know, how they’re serving and the families that they serve, I suspect that they, before they went through a cohort and got their FDA designation, I suspect that there was a transition taking place within them and without them and in a sense as the butterfly goes through chrysalis and emerge that you know, emerges from Caterpillar to butterfly. You emerge from the technical adviser geek that I was, and so it really was a journey of about 10 years for me, in which I began to absorb everything that I could that was non technical, but I thought of incredible value in terms of understanding how to better serve family systems, and particularly, family enterprise family business systems. And in that process, Steve, kind of the end of a 12 year journey I left the large law firm I was a partner in I founded the purposeful planning Institute, the purposeful planning moniker that the Institute bears. Five years earlier, I was referring to this new kind of expansive view I had of what was needed besides the pure technical planning the structuring side of it, I viewed it and described it as value centric. And if you I don’t know if this happened in Canada, but in the US in the mid 1990s, early 1990s There was a movement here there were several movements taking place, but one that significantly influenced me was called the values based planning movement. And life planning, as a separate kind of field and discipline began to emerge at that same time, but there was this new emphasis on really getting aligned with what matters most to clients and understanding that perhaps it wasn’t just the technical legal accounting finance, big issues that we as technicians. Saw, but sometimes what mattered most of them might be legacy might be the family heritage, the family culture, the cohesion and harmony that they wanted to see maintained or even expanded, built on within their families. So I grew increasingly uncomfortable with value centric planning or values based planning. There was too much emphasis on the values. They’re very, very important. Don’t get me wrong, but I think they became kind of limiting. And my view is more expansive of what was needed. And I thought about intentional planning. I’d like to think that we were, what I was suggesting and what many others who had influenced me and who’ve been part of this journey with me. were suggesting was that there was a much greater need. For more focus, more energy, more reflection, I’d love to just bold and underline that word reflection, Steve, that clients needed to be more reflective than advisors and consultants needed to be more reflective and they needed to learn how to help clients be more reflective. And so I began to migrate away from value centric value based and began to think about this expanding and broadening beyond just values and virtues and family heritage in a sense and it really was in a car between Cincinnati and Louisville. I was driving to speak at a symposium and the person whose car I was driving with, we engaged in a conversation. She had a very similar mindset. And somehow between the two of us, I’m not sure who first we were talking about, what should this be called, as we were going to both speak at this symposium for technical advisors, what should we call what we’re talking about? And purposeful just came into the car and it was kind of amazing, Stephen 510 minutes. It just settled on me. And I knew that was it. That was the term and then since then, it’s great that it’s a term, but it’s more important that we begin to you know, put meat on the bones of the term and that’s been the real challenge is trying to help people understand how both broad and deep this concept of purposeful planning is.

8:50
I like the word reflection and how families should spend more time reflecting and us as their advisors can be thinking partners and reflecting partners for them and with them. You mentioned some of the people who have been on the journey with you and I’m pretty sure that leading the journey and one of your mentors in this space is J Hughes. And I’m sure most of the people have heard of J Hughes. And if not, it’s long overdue that they should James E. Hughes. Can you tell us a little bit about his role in getting you on this road? towards more purposeful work?

9:29
Yeah. Then reflecting back on that kind of tangential shift. It was really a huge shift that took place in my practice. If you think of somebody that was committed to giving 50 to 60 hours billable time wise, to tax and wealth transfer planning work, then to be exposed to somebody that could lift me up out of that rat race I was in and helped me see what the possibilities were if we would become more reflective, more intentional, more purposeful. Jay Hughes is one of as I reflected back, I would say I’ve had three great mentors and there’s a lot of other influencers. But these mentors were people who really, either their example or their wisdom, their kindness, their belief in what I was doing. It propelled me along this path that I was marching on and sustain me and J was probably the earliest of the three mentors to show up. And that story, Steve bears telling. It was early 2001 And I had one of the wealthiest family enterprises, family systems that I was working inside of in this big law firm that I was a partner in the entrepreneur, Patriarch, wealth creator in this family system. He took me to lunch one day, and gave me a book a little green book called family wealth, keeping it in the family and I thought that title fit this client very well because he had created massive family wealth we were in fact he the most significant interestingly, for this conversation, the most significant thread of his wealth was Canadian natural resource position, the company that he was a co founder of had become the largest Canadian natural resource company in this area was about to go public. And you know what the boom and bust cycle and Canadian natural resource and US natural resource companies can be well, you know, we were looking to the bus I mean, the boom cycle and didn’t realize the bus was just three or five years out at that point, but all we could see was boom, and where we had come from and what the estimate bankers were telling us where we were headed, and this would have propelled this family into the billionaire category. Anyway, he gives me this little green book and says, Could you read this in the next 10 days and let me know your thoughts and I took that book home. And I know you’re going to ask for a book recommendation. I would just say this is a recommended book. There are five books that J Hughes James E uses Steve correctly described him, but his friends and family call him J. And J has been the author or co author of five books. The first of them was family wealth, and I think if you’re going to dive into his works, you’ve got to start with that book. Anyway, I took it home. It’s laid there at home for two or three days and that the weekend came and I sat down and I I don’t know if you’ve ever had an experience with a book Steve, where you just run to it, you know, you start you get into the preface, the introduction, acknowledgments and you can’t wait to get into the first chapter and, and once you’re in, you’re in, and I wasn’t in. I was in for six hours that they know it’s about 150 200 pages. It isn’t a difficult read, but it absorbed me and couldn’t wait for Monday morning. I called my client up and I said, Oh my gosh, thank you for sharing that with me. This is the most amazing book. There’s so many new paradigms that he is putting out that I think is what I’ve been missing. It’s what I’ve been looking for, and he says long glad to hear that. He says I’d like to hire him as a consultant that he then told me what is kind of desire was he wanted to engage in a process to prepare his children. For the wealth that was coming down the pike he had already created the structure that his children own 60% of the equity that he was building up and all of these different companies and particularly this one Canadian venture. Anyway, he said, Yeah, I been looking for a consultant that can help me prepare my children. I think this is the man would you would you try to reach him? I’m going to spare you of the long story. There was a providential element to it. It was I had really totally given up hope the librarians in our we had, you know, a staff of librarians in this large law firm and they could not find this man. The reason they couldn’t he had retired four years earlier. From the Office of Law and had moved from New York City to Aspen, Colorado. I didn’t realize it was in my own backyard but and just out of the blue in a conversation after I had already told my client that this man could not be found and my client and said while I’m reading another book, I actually think it’s as good or better. It’s called Seven Habits for highly effective families by Stephen Covey. And I say Oh, well, I know Covey is estate planning attorney. And he said, well then get in touch with him. I want to hire Covey. And that was my charge. But before I could get on the phone and initiate that engagement, I was talking with a partner and I said, By the way, do you know in New York City lawyer by the name of James D. Hughes, Jr. and he swiveled around in his big chair, and I thought he was going to tell me to get the flippety flip out of his office instead. And when he comes around, he’s holding the st. Green Book. I just finished reading over the weekend. And he says, You mean Jay Hughes? I said, Jay, and he says, Yeah, that’s what family and friends calling his significant other as a client of our firm they live in Aspen actually Snowmass. Anyway, he said, I can get you his contact information if you want it and I said, Yeah, give me an all I can’t give you his number, but I’ll give you his secretary’s number. So that you know two days later, I was talking to Jay Hughes, he called me from Paris. He was on his way back to the US in about a week and we agreed to meet at the Denver Airport is he transmitted to Snowmass or Aspen and he had a three and a half hour layover. And we took up almost two hours of that with a meeting with my client. And the end of that the client engaged him and the rest is history. He he worked with that family for five years. It was an opportunity for me to carry his briefcase just if anybody ever has an opportunity like that. It’s the most amazing experience it completely turned upside down my world and it it was like taking blinders off. Steve, you know you. You mentioned how much you like that word reflection. I think along with reflection is vision. And I had blinders on the technical blinders that were telling me this is the way we do it. And I was trying to do it better, faster with

16:40
that’s how everyone’s always done it and that’s what’s been making money for all the advisors and all of a sudden you come and you say we want to do things where we concentrate on what’s good for the family. You’re turning things upside down and you’re now going up against a well oiled machine that is there that has been set up for all your lawyers and accountants and everybody to be able to do this and do what well for them and the families sort of come along for the ride because this is what everyone is pitching to them. So it takes a long time to turn this around. And you’ve been at it now for a while and created an organization for people who do this to come together. And I wonder Is it is it a movement or where is this whole movement from when you started to get the vision to where we are now and I still feel like we have a long way to go but we’re making progress. So am I looking at the right way?

17:42
Yeah, totally. It is a movement. In fact, early on. I called it a revolution because I was speaking to the most prestigious legal fraternity and kind of trust in the state world in the US. In fact, it’s an international fraternity a bunch of great Canadian lawyers belong to it as well. And I was speaking there and one of the Chicago lawyers I admire greatly said what you’re talking about is revolutionary and I thought about and he was so right. As you just said we’re turning things upside down. Yeah, so we’re now purposeful planning Institute is 11 years old. We have a membership that is just a little bit larger than the FDA community in Canada. But our community I’m proud to say you belong there are about 35 Canadian members. So in terms of when I talk to Canadian new member of the purpose Planning Institute, I always tell them, our most committed energetic members are the Canadians and I really feel that but yeah, we are very much revolution movement. It is changing slowly, and I’ll just offer this this comes back to J. Hughes in a conversation four or five years after I first met him and started working alongside him. Another PPI member and I drove up to Snowmass and spent a half day we did this, actually, at least two times a year for quite a few years. And it was an incredible privilege to have a half day of Jays time in wisdom. But I asked him why did you write the book family wealth? And I think this ties back to your question about movement and where we’re at. He said, I wrote family wealth to change the vocabulary, which will change the conversations which will transform the outcomes and I think, Steve, that on a molecular level is what we’re about. But it’s more than just vocabulary and conversations. It’s also a new mindset, you know, along with that vocabulary, we need to we need to take blinder, the blinders off that have been imposed on us or either self imposed or discipline imposed, be it while your accountant, wealth manager, financial planner, we do bring to the work, we’re doing blinders that tell us this is the way it’s been done, and we got to remove that just as a slave would remove shackles. It said that a horse has 70% Less peripheral vision when they’re, you know, they’ve got the blinders on. And I think in a sense, we could use a similar that metaphor of the blinders. On a horse blinders on the technician, you take the blinders off, and it’s like, you know, a two and a half times greater vision of what the possibilities are. And if it helps you see that either you need to develop greater proficiency in the non technical areas. And yes, you do. And yes, I have, and I am continuing to develop that. But it also opens you up to the possibility of collaboration. And that was one of the great lessons I learned from Jay as smart as he was. As incredible as his bank vault of experience was. Jay is a master collaborator. And there is a power to collaboration, which he helped me discover. And I’ve never turned back from trying to work collaboratively since and I really believe that if our clients are open to it, a client centric collaboration, not just collaboration for the sake of collaboration, but a collaboration centered around our client is absolutely at the core of every great outcome that this movement this revolution can lead us to

21:58
and that it’s almost as if you’re reading my notes here, John A because collaboration and the fact that there are people from I don’t know is it 20 different professions or so, and ppi and collaboration is one of the cornerstones of the FBA program. And the fact that we are forced into working on a project with other people from other disciplines. So the blinders are in part because you’ve been trained in a particular discipline. So there’s the realization that there are other disciplines and then there’s oh my god, what can you actually get done? When you all work together in your own special ways, and each take care of your own thing, but you put the client family at the center of things

22:40
exactly. Steve and I do at last count we had 21 different disciplines and professions inside the PPI community. It’s amazingly discipline diverse, but it is putting the client first and thinking not not every family needs either the same collaborative team or the same level of collaboration. That’s the beauty of this work. It’s kind of like picking up a gemstone right? There’s so many different ways to polish that stone. There’s probably a better and a best way. But I do think that it’s a privilege for us, as we have made this journey professionally to be able to step into the zone of collaboration. And it’s amazing through the FBA program, the kind of the practicum that you’re led through, and you’re you’re invited and in a sense forced into working collaboratively and you’re able to I think that those practicums at the end of the cohorts are the absolute I’m it’s so what FBA the FBA program does is so wonderful, but that opportunity to not just have heard and had your mind expanded but now to put it to application and to be invited and and see what visibly tangibly what the benefits of collaboration can be. It’s easy to pay lip service to collaboration but once you’ve actually been in a successful collaboration, and you can see the amplification of vision and possibilities that comes by working collaboratively, you’re never going to want to go back.

24:30
And I think that’s why I’d say the vast majority of the Canadian members of the purposeful planning Institute are people who have gone through the FAA program and they see it as a place to continue to learn and expand and be around other people who were doing this kind of work. And you were talking about J Hughes and the vocabulary and it’s making me think of another term I learned from Dean Fowler, who’s a longtime member, and he talks about multidisciplinary fluency. And just to be able to understand all the things that all the different advisors that touch on the family is already it puts you in a better position to actually understand the family and to help guide the family for what they need and to bring in the collaborators that they will need when they need that which like you said, it’s not always the same people that you need, not always at the same time but but an organization like the purposeful planning Institute. In addition to a family enterprise Canada gives you a network of people who have different specialties. And once you have the inclination to tap into those other resources for the benefit of your client families, it’s something that once you’ve done it and it works, and you see how powerful it is. It’s hard to go back.

25:49
Yeah, yeah. Once you drank that collaborative Kool Aid, you’re not going back, nothing else will taste good.

25:56
So the movement continues and the organization is growing and more and more people are talking about this kind of stuff. Have we hit an inflection point is I was looking at it as some of the old timers who have been there forever and had their successful advising business model are starting to retire and then some new people from let’s say, another generation like Millennials are coming in and they look at the world differently. And just somehow by the exits and the entries into the profession, things are evolving societies evolving. What kicks this into the next you know, stratosphere?

26:36
Wonderful question and an invitation to think about where we’re going. I’ve been doing a lot of thinking about that. And I think within ppi, you know, we’ve kind of felt that the number one mission or purpose in our mission statement is to explore and share best practices, the best practices that are needed for successful transitions within both the family enterprise and we don’t call it just a wealthy family, but we call it a legacy family. So I think Steve that best practices is kind of like the universe. It’s expanding. And you’re a part of that there are a lot of other great thought leaders and disruptors, industry innovators, we call them who are helping us to see, you know, through a different lens, what the possibilities are, and this kind of library of best practices is growing so that that will continue. And that I think that evolution is it’s taking place. And if an advisor wants to kind of ride the wave of best practices, I feel like PPI is a great innocence graduate school for an FTA to be able to tap in to not not every what we call thought leader and industry innovator call is going to be that powerful, but I would think that at least one out of three one out of two are going to be just an amazing opportunity for you and I and the other members of the purposeful planning Institute to discover new ways new best practices. I think the other thing that we’re doing within PPI is we’re, we’re moving away we’re going to continue to have the live gathering, as you said, we’re hoping rendezvous can take place in person. I’ve got my fingers crossed. I, I’m hoping that we’ll be there. It certainly seems like we’re moving to get on top of it. So we’ll be able to do that. Successfully and travel restrictions may loosen up significantly over the next six, eight months. That’s my hope. But we’re also moving rapidly into the world of virtual and we’re, I really see that there’s three areas for this movement revolution to be absolutely effective and as successful as I hope it can be. I think there’s three areas that we have to really move the dial in. One of them is within the advisory and consulting world. The so that’s our primary focus at ppi is with the advisors and consultants. But the the other world that we’ve got to change is the client, the family, the family system, the family enterprise. I think that you know if we talk about taking blinders off of the professionals, clients have blinders on.

29:43
And they don’t know what they don’t know. They don’t know where to find it. So yeah, there’s an education job that really needs to be done there.

29:50
That’s part of this future is we’ve got to create more demand for purposeful planning and help them see what the possibilities are. And the third area, which I think ultimately we’re going to want to address is more perfect, robust collaboration. So all three of those are very important to us. at ppi and I think, you know, we’re moving rapidly to develop some elearning programs that are going to help with this new vocabulary, the new conversations, the new tools, I think FTA is going to be a source of tremendous skills and practice building. So I view what we’re doing as complementary to FBA. And I would think that people that go through our virtual or elearning curriculums are going to want to get a hold of what FBA offers it to me there’s just a perfect kind of synergy or marriage between the FDA and FTX and ppi.

31:04
There are so many overlaps and I just want to say those weekly Tuesday one hour calls with the thought leaders. I’ve been a member now for seven, eight years I’ve been on over 100 of them. And more often than not, I leave with some nuggets, some ideas, some book recommendations something and even if it was only for that if the membership would be worth it. I’ve got to transition this now into the segue out. So John A this has been really interesting. And I want to thank you for being here today. We’re getting to the end of our time. I’ve got a couple of final requests as usual. So I need one book recommendation and you’ve already hinted at what it might be perhaps. And then one last thing is a piece of advice. We always ask ask our guests who are advisors to families. Can you give one piece of advice as an advisor to families to other people who are listening who are also advising family? So can we start with a book recommendation?

32:01
And Steve I did mention family wealth and the other books that Jay has written I absolutely stand by that. But I as you invited me to think about this, I’m going to share another book that I think while not as directly applicable to me, this book was part of my transformation and it opened me up so that I was the student ready for the teacher to appear. When J Hughes walked into my world. That book is called time to think by Nancy Klein. And she has a second book out you’ll love the first book you’ll want to buy the second one too called more time to think but this is an incredible book to help us appreciate that to be a great advisor consultant. We have to become a thought igniter for our clients and she teaches us ways in which we can tap into reflection vision, deeper purpose, meaning intention and what we’re doing so you’ll learn about concepts like thinking partnerships, thinking councils, you can apply all of the principles and paradigms that she teaches to the work of family enterprise consulting and advisory work. So I’m going to that’s going to be my

33:26
I love it. John eight, you know, often I say oh, that’s a good one. I don’t have that one yet, or somebody already told me to read that. Well, this is one time to think by Nancy Klein. K L i m e and we’ll have a link to it in the show notes. But it was Kathy Wiseman who put me on to that book and I read it a few years. So thank you for that. Yeah. So now the one piece of advice.

33:47
Well, I think it’s you’re gonna think I borrowed this from Simon Sinek. But the person that really taught this, to me was the second of the three great mentors I referenced earlier. A law school dean, editor of a treatise in the trust and estate area. An attorney by the name of Stan Stanley, Nealon. And Stan, once in a very critical project that I was involved in. I reached out to him because of his unique expertise, deep expertise in the trust and estate world. And Stan, I laid this big problem out in front of him in five or 10 minutes. And he listened and he asked, why a trust. Why this trust the project involved around a trust created in the mid 1980s that held a 60% interest in that Canadian venture I was talking about earlier, and we were about to see this explosion of wealth, and it was going to far exceed the capabilities of this trust. And so Stan led me back and asked why a trust why this trust and that going down to the why level and stripping away. He listened to me spout off all of the traditional why’s for a trust said no why this trust, you know, that comes with every trust, why this trust and that invitation led me to realize, well I’ve created a client exercise a tool called why a trust why this dressed it’s profound and its impact with clients and helping them expand their vision but that that question why? Why a family entity why this family entity that to me is transformative and it’s simple. But everybody listening to this and if you could adopt a why a whatever it is why this whatever it is, I think you’ll have the same incredible leap forward in terms of effectiveness. And opening up a client in your own vision for what the possible outcomes are. And it will just change everything.

36:08
I love it. It’s sort of like Oh, hang on a sec. Let’s stop and think about this for a second. Why are we doing specifically this and you better be able to explain this. this has been great Johnny. time flew by quickly as always, just thanks for joining us, Johnny Warneke thanks for sharing your expertise with our audience. Thank you, Steve. Listeners. if you haven’t already subscribed, please do so to make sure you never miss any of these monthly episodes. Thanks again for joining us, I’m Steve Legler. Until next time.

36:40
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