I'm pretty sure that's a lumbrinerid (family Lumbrineridae) of some sort. Although I've seen some photos of peanut worms (sipunculids/family Sipunculidae) that do appear very similar (see this link:
http://www.wildsingapore.com/wildfacts/worm/sipuncula/sipuncula.htm ), your individual appears to have parapodia (leg-like appendages), is uniformly narrow along its length (sipunculids typically have a bulbous posterior end) and is segmented (sipunculids can appear so, but they're not). The head area (prostomium) is also typical of lumbrinerids (bare, spherical or conical with no apparent eyes or tentacles/antennae).
Lumbrinerids are in the order Eunicida, have large eversible jaws (like we see in
Eunice spp. worms) and are typically, but not exclusively, carnivorous (some apparently are deposit-feeders/detritritivores, and some eat plant material). As for the carnivorous species, prey items include other polycheates (like tube worms), little brittlestars, 'pods, nemerteans, etc..Interestingly enough, I read about one species,
Lumbrineris flabellicola, that's a commensal with corals in the family Flabellidae (genus
Flabellum) and Caryophylliidae (genus
Caryophyllia). According to the report, they grab food from the coral, but don't actually prey on the coral itself.
All in all, Lumbrinerids are interesting little critters. I guess the elephant in the room is whether one would be a safe addition to your system. On the plus-side, these guys typically stay pretty small, so even if it's a largely carnivorous species, livestock loss should be limited to the small stuff. Also, if it's a deposit-feeder, you'll have one more critter in there to help with detritus removal. It's up to you.
Here are some links with more info/photos:
http://personal.cityu.edu.hk/~bhworm/errant/lumbrineridae.htm
Unknown species, but a lumbrinerid similar to yours (may be the same genus):
http://www.roboastra.com/brunsworm/brwo378.htm
This is a good link (pdf file) for species in NE Atlantic waters, but it's got some terrific general information and photos:
http://www.nmbaqcs.org/media/11296/lumbrineridae_guide_nmbaqc_2010_ver3_2.pdf