New rules regulating advice to retirement accounts are projected to cost financial firms billions of dollars, and according to a recent analysis, more than the rule makers anticipated.

The Department of Labor estimates that its fiduciary rule will have a $15 billion impact on the financial industry, but a revised report released Wednesday by Chicago-based Morningstar says the agency may understate the rule’s impact.

After reviewing the final language of the rule, Morningstar’s researchers still believe the fiduciary rule is a major disruption for the financial services industry and that it will affect $3 trillion of IRA assets and $19 billion of wealth management revenue.

“We believe it will disrupt many business models in the industry,” said the report. “We’ve already seen the exit of several foreign banks from the U.S. wealth management landscape, the sale of life insurance retail advisory businesses, and the restructuring of wealth management platforms in anticipation of the rule.”

Morningstar’s report, titled “Final Department of Labor Fiduciary Rule’s Effects Are Substantial,” nevertheless said that the final rule is in many ways more lenient that the DOL’s initial proposal, noting that the final language added exemptions and eased requirements on advice providers.

Others agreed.

“I get a sense that this rule is less onerous; it seems like everybody feels that way,” said Tim Slavin, senior vice president of retirement services at Lake Success, N.Y.-based financial services provider Broadridge Financial Solutions.

“Nevertheless,” added Slavin, “clearly the DOL intends to enforce the spirit of the rule, having hired 100 new investigators recently. You don’t get funding for 100 new investigators unless you plan to investigate something.”

In its report, Morningstar predicts that the operating margins on wealth management IRAs will decline by “several percentage points” and that $250 billion in wealth management assets will move to a different investment service offering.

In its report, Morningstar’s researchers believe that more financial business will move to fee-based accounts, robo-advisors and passive investment products as a result of the rule, continuing and accelerating trends already in place.

“Firms are moving to level compensation, changing their fund lineups, dropping their 12b-1 fees altogether,” Slavin said.

Financial technology companies will play a “key role” in meeting the requirements of the fiduciary rule, said Morningstar. Advice and investment management made scalable by technology will be in higher demand, and more firms will create partnerships or launch in-house digital advice providers as a result of the rule.

More than $1 trillion in assets could shift to passive investment products in the rule’s wake, said Morningstar, with $140 billion coming directly from broker-dealers moving to a fiduciary standard. Companies providing suites of passive, index-based products like Vanguard, Charles Schwab, BlackRock and State Street stand to benefit.

More than $200 billion in annual IRA rollovers will likely fall under the rule, said Morningstar.

“Rollovers can actually continue as they are today when using the full best-interest contract exemption,” said Slavin. The best interest contract exemption, or BICE, permits most existing compensation structures to continue as long as the advisor signs a contract acknowledging his or her fiduciary status, adheres to ERISA’s impartial conduct standards, discloses information regarding any fees and potential material conflicts of interest, and maintains records demonstrating his or her continued adherence to contract standards.

In order to roll over client assets into an IRA, Morningstar said that wealth management firms will also have to show why the rollover would be in the clients’ best interest and show them what the benefits are for extra costs they might incur.

Active asset managers like Eaton Vance, Invesco, Legg Mason and AllianceBernstein will need to rework their payment structures, said Morningstar, to revise and possibly eliminate revenue-sharing agreements and 12b-1 fees.

Companies with hybrid services like Raymond James will likely adopt the fiduciary methods for their taxable accounts to avoid having two different systems and to avoid giving clients the perception of two differing service levels. For this reason, the advisor forces of full-service wealth managers like Raymond James and the wirehouses will likely consolidate in the rule’s wake.

Even level-fee RIAs would be subject to the standards of a streamlined best-interest contract.

Morningstar said that with the potential reduction in rollovers, retirement plan providers could benefit because more assets will stay on their platforms. But net inflows to wealth management firms will decrease.

Tom Corra, the chief operating officer for Fidelity Clearing and Custody Solutions, agrees that the rule presents complex challenges for the financial industry, but believes that most financial firms will be able to implement systems, particularly for account opening procedures, to ease the transition for advisors into compliance.

“The best firms are going to utilize the coming of this rule both to comply and to potentially adapt their business to compete in what may be a much different environment moving forward,” Corra says. “They’re going to find a combination of processes and technology that will ensure that compliance doesn’t add a tremendous amount of cost to the way they do business today.”