Independent broker/dealer Financial Advisers of America has reorganized its senior management to support the firm’s growth and allow senior executives to focus on recruiting advisors. The firm’s former CEO Ken Johnston is now chairman, while former President Jodi Johnston has transitioned to CEO. Chief Operating Officer Todd Pack has taken on the role of president, and he’ll continue his chief operating officer duties as well.

The firm, which manages $3 billion in assets, previously had an in-house recruiter, but that person was bringing in advisors who the senior executives felt were not a good fit for the firm, both in terms of culture and product focus, said Jodi Johnston, who visited Registered Rep.’s offices Wednesday. She and Ken decided they wanted to do the recruiting themselves. The new management structure allows them to go out and do more recruiting and hold face-to-face meetings with advisors, while Pack can help with the day-to-day operations in the firm’s home office in Carlsbad, Calif.

FAA has grown from 135 advisors a year ago to 200 today. In 2010, FAA’s revenues doubled from to $11 million from $5 million the previous year. The IBD also recently added an in-house 401(k) expert, three new regional managers and more operations and compliance staff to support the growth.

And while FAA is still growing, it doesn’t want to expand past 300 to 350 reps. The Johnstons want to grow slowly and strategically, and they have no plans to sell, Jodi said. FAA’s focus is not so much on the number of advisors they bring on, but on the quality of the reps, Jodi said. The firm is very selective because the Johnstons want to protect it from rogue reps and rogue products, she said. Lately, a number of IBDs have imploded because of bad investments. Many firms that sold allegedly fraudulent private placements have shut down.

As a result, FAA has been very picky, looking carefully at the investment products that prospective reps have on their books. Pack, who handles the firm’s due diligence, said FAA’s review process is a difficult one; it has rejected 82 percent of the advisors reviewed. He doesn’t expect the investment blowups to stop any time soon.

While FAA does look at production when selecting recruits, the firm is more focused on personality and product mix, Jodi said. For example, the Johnstons were in conversations with a $1 million advisor but they decided he was not a good fit because 100 percent of his book was in real estate investment trusts (REITs).

Meanwhile, recruits are asking the right questions, Jodi said. They’re not just worried about the firm’s rep count; they’re also asking about errors and omissions coverage and net capital. If an advisor wants to use a certain product and the firm won’t allow it, there’s very little push-back because advisors are realizing the risks are great, Pack said.