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Ballast – the boutique all-rounder from Western Australia – is picking up speed and aggressively expanding. MPA caught up with general manager Frank Paratore to learn more

In this business it pays to be friendly to the competition. Frank Paratore, general manager of Ballast, can attest to that.

Almost 20 years ago, the company Paratore was working for was bought out by its competition. Fast-forward to 2009 and Paratore’s company Ballast bought out Sound Finance Group – the directors of which belonged to the acquisition Paratore was involved in two decades earlier.

“It just goes to show that you never know when people from your past will pop up again,” he says. And when you’ve in been in the business for as long as Paratore has, it’s hard not to know just about everybody.

He was recently made general manager of Ballast – a boutique multi-disciplined independent financial services group located in Perth. The ‘one-stop shop’ company offers finance, insurance, planning, superannuation, accounting and settlements services Australia-wide, and is both a wholesale and retail aggregator. It currently has more than 100 brokers and 22 financial planners.

Paratore landed the top job by convincing Ballast’s directors Wayne Blazejczyk and Kaylene Bishop – whom he’s known for more than 10 years – that the time was ripe for Ballast to expand its reach. “I always thought Ballast could be very successful as a diversified boutique independent financial services group,” he says. “I told them ‘if you guys are ready for this then I want to take the business further’.”

And so far for Ballast, Paratore has made good on his word. He started in February 2009 and by August Ballast announced its acquisition of Sound Finance Group. The deal included the purchase of two retail offices based in Victoria Park and Rockingham in Perth.

At the time, Paratore commented on the deal by saying: “It is extremely important to us that
as we grow we never forget the qualities that have made us so successful in the first place. Sound Finance and our new Midland branch are a good fit with Ballast’s business ethos and we are very pleased to announce that all existing staff will be retained.”

Up until that point, Ballast really had a more wholesale mindset, Paratore says. But part of his key performance indicator (KPI) is to expand the retail aggregation business. “I believe in removing obstacles,” he says. “If brokers want full support, then there’s the retail side of the business. If brokers want more limited support, then we have the wholesale side.”

Ballast experienced another growth spurt in May when it opened three new offices in Western Australia. The expansion brought Ballast’s total numbers to seven offices nationwide, and expanded its reach to clients in South Perth, Melville and the Goldfields region of WA.

“Increasing the reach of our operations is essential in maintaining a growing and successful business. Our newly-opened outlets will allow Ballast to increase its presence in WA, and continue to provide the highest standard of financial services and products to our new and existing client base,” Paratore says.

Homegrown

This rapid growth has cemented Ballast’s place in WA, which is an area that Paratore himself has a solid base in. Paratore has always resisted the allure of the country’s bigger financial centres. Homegrown in the west, he graduated in 1991 with a BA in Business from Edith Cowan University in WA.

Straight out of university, Paratore joined Household Finance Corporation (HFC) an American-based group. It was a second-tier lender that specialised in personal loans, mortgage refinancing and home equity loans.
“It was a very quick baptism of fire in the industry,” recalls Paratore, “but it was a sensational training ground,” he adds. Paratore worked there for 12 months as a loan writer and was quickly promoted to branch manager, where he stayed for another four years.

Then HFC’s major competitor at the time, AVCO, bought the company out. Paratore says AVCO earmarked 12 individuals to remain with the group for six months – of which he was one – but after this time was up he decided to move on.

Paratore then joined AGC – Westpac’s finance company – and spent two years there as the state sales manager. “Up until that point, I was mostly dealing in personal loans, credit cards and second mortgages – but had limited experience in the true residential mortgages. I really felt I needed to broaden my horizons,” he says.

So from there he joined Trust Bank, the state bank of Tasmania. At the time, Trust Bank was looking to expand into mainland Australia by selling residential mortgages through the third-party channel.
“So that’s when I really started dealing with brokers – in 1997. Which is really not too far down from when the broker industry got going in Australia,” he says.

Trust Bank was then taken over by Colonial, which was later taken over by CBA. “That was the start of many mergers in the late 1990s. At the time, Kathy Cummings was boss of CBA. I survived through all of these changes, but I wondered how long I would continue to survive. CBA said it would stay committed to the broker channel, but I wasn’t sure for how long. True to Kathy’s word, they did,” he says.

It was at about that time that Garry Driscoll, who was at Homeloans Ltd, came calling. Driscoll (who has since moved to Mortgage Ezy) offered Paratore a position with the non-bank and Paratore took up a role as state manager for
five years.

Then in 2005, Paratore says he was “saved” by Aussie, and chosen to grow the “true third party channel”, which he did until he joined FinanceCorp as general manager between 2006–2008. Then in 2008, Mortgage Solutions hired Paratore as their GM.

Unfortunately, the new position coincided with the worst of the global financial crisis, and Mortgage Solutions was forced to cut Paratore loose. But their loss was Ballast’s gain.

Growth through adversity

Convinced that the financial crisis was a time of great opportunity, Paratore persuaded Ballast’s directors to use their strong cash flow and strong financial position to grow the business.

“The GFC was a blessing in disguise,” he says. “While other groups were pulling their heads in, I said, ‘let’s take a more aggressive approach’.” In addition to looking at expansion opportunities, the company began spending more money to put its name out there.

In July 2009, Ballast confirmed it would be the MFAA’s Western Australia platinum sponsor – a commitment it reaffirmed in 2010.

As well, Ballast decided to host a series of ‘sundowner’ parties in WA for industry participants – both for Ballast members and non-members alike. “We deliberately didn’t use the sundowners as an opportunity to talk about our model,” Paratore says. “They were just about injecting a bit of fun back into the industry.”

Paratore says the group is still looking for more growth, but the emphasis will be on finding businesses that are aligned with Ballast both strategically and culturally.

“There needs to be a true understanding of what diversification really is,” he says, adding that it’s something a lot of companies out there still aren’t doing well. “Which is good for us,” he admits.

Industry issues

Ballast’s general manager Frank Paratore weighs in on some key issues facing the industry

Fee for service: “I like the fee for service model,” Paratore says. “I think it brings  a lot of transparency to the industry.” According to Paratore, the public is happy  to pay for services where they see value – and if you’re a good broker then there’s nothing to fear about the fee-for-service model. Paratore was even as bold to predict that within 24–36 months the industry will witness even greater movement in that direction. Part of that can be attributed to the fact that the financial planning industry is moving down that path and the two industries are closely aligned.

Minimum loan requirements: The introduction of minimum loan requirements by certain major banks has been a hot button issue for brokers across the country. Paratore says he believes accreditation should be based on quality and conversion, not volume. “If a broker can give you a good deal, then they shouldn’t be punished for submitting loans less frequently,” he says.

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