Andrew Welsch

James Gorman laid out plans for the wealth management unit, which turned in record earnings for the fourth quarter.

Coding and other billing system errors were to blame, according to the regulator.

The advisory business ended the year on a strong note, boosted by growth in net interest income, which rose 14% year-over-year.

The business, which includes Merrill Lynch, said profits were up 1.8% year-over-year, but down 9% from the previous quarter.

Planners act on expectations of pro-business, anti-trade initiatives by the incoming administration.

The changes are the first under David Kowach, who became president of the wirehouse's traditional employee broker-dealer late last year.

An internal memo informs the firm's 15,000 advisers about the move, which builds on management changes made earlier this year.

Though some say the rule's future is in doubt, the firm is going ahead with sweeping changes it hopes will make its advisers more competitive.

The regulator plans to ramp up scrutiny of bad brokers and electronic communications, among other new measures.

The planner, joining from Robertson Stephens, also has worked for UBS and Merrill Lynch.