In Brief: Bell Financial, Pinnacle & Computershare

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This story features BELL FINANCIAL GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: BFG
The company is included in ALL-ORDS

Bell Financial Group offers a growth pathway to more resilient and recurring revenue growth, Metrics private credit is dissected re Pinnacle, and risks of tokenisation disruption for Computershare.

• Bell Financial builds scalable wealth platform targeting 7m unadvised Australians
• Pinnacle’s Metrics poised for earnings growth despite private credit headwinds
• Tokenisation threat grows as new digital players potentially challenge Computershare

By Danielle Ecuyer

This weeks quote comes from Morgan Stanley:

“Artificial intelligence has reached a new inflection point: Companies are deploying AI inference at scale, and agentic AI systems are now capable of planning and executing complex tasks.

“This is driving a sharp increase in the consumption of compute and tokens, while placing new demands on the software, data and infrastructure required to support AI’s massive expansion.”

Diversification and modernisation help build a hybrid platform

Research as a Service hosted Bell Financial Group ((BFG)) at the ASX SMID (Small and Mid Cap) conference, with the analyst coming away with an interesting story on the increasingly diversified financial services group.

Bell continues to operate the historical stockbroking business across retail, institutional and corporate sectors, with a range of financial products incorporating margin lending, portfolio administration, trade execution, clearing and settlement, and cash management.

Strategically, management has been diversifying the business away from the more market-facing businesses like broking towards more recurring revenue earnings models aligned with margin lending, external platform sales, third-party clearing, and portfolio administration.

Supporting the businesses is a 100-strong IT team of professionals who have developed internal systems for account management, known as Fusion, and cloud-based trading platforms.

This platform is the base for services offered to financial planners and third-party clearing, with the optionality to add more intermediaries, as well as additional products and services to enhance the total offering and monetise the investment.

The private wealth platform is targeting an estimated 7m Australians currently not receiving advice or using online platforms outside of their home and superannuation.

Notably, RaaS highlights Bell is the only domestic wealth firm with an online and full-service advice offering. Online has around 159k accounts and, with platforms, $42.2bn in funds under administration as at the end of 2026. Including full service, funds under admin (FUA) came in at $49.7bn.

With cost often an impediment to a full-service offering, the hybrid model as developed by Bell is aiming to service the estimated 7m Australians which remain “unadvised”.

Some 1.5m are currently actively advised and 1.5m are active on an online platform.

The upcoming partnership with Praemium ((PPS)) is integral to the hybrid model by delivering users to a new suite of asset classes ex equities. The rollout is flagged for this year (2026) and will replace the existing IPS system, which is two decades old.

Additionally, new global partnerships are expected to be announced, adding further to the new internally developed products, notably Self-Managed Accounts (SMAs).

Positively, the group has started FY26 strongly, with Bell Potter ranked number four on the Dealogic tables for equity capital market raisings. RaaS forecasts activity of $1.6bn for FY26, spread evenly across the first and second halves.

Relative to its peer group, the stock is trading at a -57% discount to price to tangible book assets relative to ‘smaller’ platform companies Iress ((IRE)) and Praemium.

Bell is also trading at a -16% discount to price to tangible book assets for Canadian-listed peer Canaccord Genuity, with the highest forecast dividend yield of 8.3% and a robust cash position.

RaaS does not provide a target price or rating on Bell Financial Group but has a valuation of $2.33, down from $2.40, due to changes in peer valuation multiples.

Weighing up the outlook for Pinnacle’s Metrics

Canaccord Genuity points to adverse sentiment (globally) on private credit operator Metrics as one major factor weighing on Pinnacle Investment Management’s ((PNI)) share price.

In contrast to the adverse headlines in the global media regarding retail investor redemptions at major private equity providers like Eres, Apollo, Blue Owl and Blackstone, Metrics is viewed as being at an “inflection point”, with net profit after tax expected to improve “materially” as several acquisitions start to generate positive contributions.

The improvement is anticipated to be sustained into the medium term as losses from Navalo moderate, performance fees return and are forecast at around $10m in FY26 based on year-to-date outperformance, as well as high fee margins from rising funds under management.

Better funding costs are also flagged to boost net interest margins in 2H27 and FY28.

Focusing on the recent acquisitions, Bigstone, Navalo, Taurus Motor Finance and BC Invest, Canaccord believes Metrics has already sought to address ASIC concerns around private credit managers’ over-exposure in commercial real estate lending and the possible effects from an economic shock or downturn.

Management has sought to expand exposure of the loan book to residential mortgages, automotive, equipment and consumer finance.

Breaking down Metrics’ assets under management, the funds/trusts usually hold over 100 individual loans, with sizing of the positions under 1% of assets under management (AUM).

The loans are, on average, floating rate with a BBB-BB rating, secured and senior ranked, with the majority having an average weighted term to maturity of under 18 months.

Metrics is expected to grow net profit after tax to $90m-plus in FY28 from around $23m p.a., and the share of Pinnacle’s net profit after tax is expected to lift to over 10% from 7% in 1H26.

Pinnacle owns 28.4% of Metrics.

While acknowledging the sentiment impacts around redemption concerns, as per global news headlines, Canaccord rightly points to the possibility of “second-order” impacts on the credit assets from the Middle East conflict, which could weigh on loan serviceability in the latter part of the year.

Compositionally, Metrics is generally overweight real estate development, and the analyst points to possible industry headwinds if materials prices rise substantially.

The analyst is closely observing the loans on “watchlist” and “under enforcement” in all the funds/trusts, which remain “particularly low” and, on average, are under 2% of AUM.

Regarding redemption risks, some of Metrics’ funds are lower-risk products which usually allow investors to redeem monthly, and across circa $20bn in AUM, these funds are available for quarterly redemptions or already in run-off (capital being returned over time rather than being reinvested).

Regarding Pinnacle, Canaccord lowers its target price to $24.53 and retains a Buy rating.

The stock re-entered the Small Ordinaries last week, and it is likely investors are revisiting. Earnings forecasts are lowered as the broker marks to market for February-end, noting consensus estimates are “stale” or out of date by over two months.

The risks of financial disruption and innovation are permeating once-considered safe companies with perceived competitive moats, the broker concludes.

Identifying the defensive moat charteristics, or not, for Computershare

Jarden has been flagging concerns over the possible impacts of tokenisation (tokenisation refers to the process of turning real-world assets or financial instruments into digital tokens on a blockchain) on Computershare ((CPU)).

Following recent industry engagement and marketing, the analyst highlights a more nuanced understanding of the “key defenses against the Transfer Agent (TA) structural disruption” risk.

The defenses are noted firstly as the mandate in securities law, which offers regulatory protection, with transfer agents like Computershare required by law.

The analyst pushes back on this view, explaining the SEC has suggested the master security file must be with the transfer agent as the single authoritative record across on-and-off chain data.

This proposition comes from staff-based conversations rather than “enacted rules” and does not offer any details or colour around which registered TA holds the function.

Jarden points to the newer, blockchain-focused firm that has registered as a transfer agent, Securitize. The New York Stock Exchange has selected Securitize as a digital TA.

Exemplifying tokenisation does not eliminate the TA requirement, but it opens the door to new competitors.

High switching costs, notably for existing clients, are served up as a defense, with the analyst arguing Computershare will be able to offer a digital TA solution immediately under the new Industry Settlement Transformation model using partnerships with technology vendors.

While this may appeal to existing clients because of high switching costs, new companies issuing securities on tokenised platforms can select a provider from scratch. As the technology is normalised, there is a risk to Computershare the early digital capability is eroded.

The third defense outlined, and viewed as the most “credible”, relates to the complexity around corporate actions like rights issues, particularly, which are very complex to run on-chain.

The near-term risks are considered more “measured”, and corporate actions revenue is not believed to be as much at risk on the same timeline as register maintenance.

Jarden remains Underweight the stock, meaning index-oriented portfolios own less than the market cap index weighting. All others might see it as a Sell-equivalent. 

Its price target is $30.

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