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.

The former broker, who pleaded guilty to securities fraud last month, allegedly promised clients returns of up to 15% and used proceeds for personal expenses.

The new recruit, who started with the wirehouse's predecessor firm Smith Barney, has been in the industry since the late 1990s.

The new recruits previously generated $1.5 million in annual revenue at UBS, according to the regional brokerage firm.

The adviser had been employed with the firm for seven years prior to her dismissal, and had no disclosures on her BrokerCheck record.

The regulator said "significant deficiencies" affected hundreds of millions of records.

Both recruits have more than two decades of experience.

The new hires opened two offices for the regional BD.

The fast-growing firm has recruited 25 advisers this year, and is affiliated with Raymond James.

"I lose years of my life. They can settle, write a check and move on," says an adviser whose book of business dropped by $40 million after he alleges he was wrongfully terminated.

The wirehouse will leave its core pay grid untouched for 2017.