A recent study by consulting firm A.T. Kearney predicts a $20 billion revenue impact for the financial industry through 2020 along with a significant shift in assets as a result of the DOL fiduciary rule, which takes effect April 2017. The study foresees a decline in sales commissions and Rule 12b-1 income; increased competition in fee-based models; a decline in expense ratios; and asset flows from mutual funds to exchange-traded funds. A.T. Kearney’s study analyzes the rule’s effects on key industry players and predicts that broker-dealers will see a significant sales impact as high-commission products (such as annuities) lose favor, industry consolidation will occur as smaller independent broker-dealers struggle to comply with the fiduciary rule, with independent broker-dealers facing the largest disruption in their business. Major asset managers are beginning to prepare for the rule’s anticipated impact and shoring up their passively managed offerings. BlackRock recently announced that it is reducing fees on its line of broad-based index ETFs and mutual funds. Additionally, major distributors, including Pershing, have begun to build out ETF-friendly platforms for advisers.