Spear Plans Divestiture to Focus on Annuities

Spear Financial Services Inc. in Glendale said it plans to divest its discount brokerage and stock exchange specialist operations to focus entirely on its main business of marketing insurance-related investments.

Spear, through its James Mitchell & Co. unit, markets annuities and other insurance-related investments through banks and other financial institutions. Mitchell accounted for 69% of Spear’s $29.7 million in revenue last year, and accounted for a whopping 87% of its pretax earnings of $2.8 million.

Spear said its directors authorized the company to devise “a plan to exit” its discount-brokerage business, called Spear Rees & Co., and its specialist business, TCW Inc. As a specialist, TCW is responsible for bringing together buyers and sellers in about 130 securities on the Los Angeles floor of the Pacific Stock Exchange.

Randy Stratt, Spear’s senior vice president, said the company will evaluate several different ways to divest the units, including a sale to outside parties or to the units’ management, or as a spinoff to Spear’s stockholders.