Consulting firms are increasingly asking themselves whether their technology stack contains too many technologies. Studies show that some consulting tools are used very rarely, inadvertently leading to technical debt for firms rather than technical efficiency.

“I think the term is worthless when people talk about it: ‘Oh, what’s your tech stack?’ It’s stupid to talk about it anymore,” said Andrew Evans, CEO and founder of Rossby Financean open architecture RIA platform based in Melbourne, Florida.

Evans is referring to the all-in-one technology platforms that many of the largest wealthtech platform providers typically offer. He compared it to every new car today having CarPlay and a rearview camera.

“Everyone just had the exact same stuff. They had to buy it because everyone else had it,” he said. “Consultants’ spending on technology keeps going up, but they’re only using about 25% of everything they can.”

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A Orion Study A study published in March that surveyed 542 advisors found that, on average, advisors use only 62% of the technology available to them. This is partly why wealthtech platforms like Orion And Nitrogen (formerly Riskalyze) have started offering technical services or software à la carte rather than just on all-in-one platforms.

“A lot of my clients have moved to all-in-one providers like Orion, Black Diamond or (another) self-proclaimed all-in-one provider… and they’re not using everything,” says Bryce Carter, senior manager and wealth technology strategist at F2 Strategy, a wealthtech advisor based in San Francisco. “If you try to be everything to everyone and offer an all-in-one solution, you may not be good at everything. So focus on the things you’re really good at and really committed to — that’s a trend I’m seeing.”

There is a caveat, however. Carter said smaller firms, which typically have less than $500 million in assets under management (AUM), mostly need an all-in-one platform until they get big enough that they need more customization. Customizing technology is costly—another reason smaller firms stick with full-service technology platforms.

F2 Strategy estimates that for a company with less than $2 million in assets under management, it costs between $1 million and $5 million to implement vendor technology and fill gaps with proprietary technology, according to a Report was published earlier this year in collaboration with Dynasty Financial Partners.

“When we do a technology assessment, I usually find that their technology budget is wasted by 10 to 20 percent,” says John O’Connell, founder and CEO of The Oasis Group, a technology consulting firm based in Monroe Township, N.J. Some firms “lose money because they have multiple solutions doing the same thing. They don’t communicate with each other.”

The technical “waste” described by O’Connell typically amounts to tens of thousands of dollars per year for a company.

“We’re at a point where people need to get a handle on this data and understand: Are we really using this product or not? And if we’re not using it effectively, should we really be thinking about whether we want to keep it and double down or abandon it?” he said.

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Joel Bruckenstein, producer of the Technology Tools for Today (T3) conference, argues that it is more a matter of a lack of vendor oversight than of technology stacks becoming too large.

“I don’t think the technology stack is too thick,” he said. “I think consultants have difficulty carefully vetting the different vendors, and vendor management is the problem.”

Some industry leaders argue that companies should audit their technology stack at least once a year, if not more often.

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“Rather than jumping right into this new shiny object and exciting piece of technology, sometimes you have to see if maybe it’s a feature that just hasn’t been adopted by another product” that the company has already implemented, said Jordan Hutchison, vice president of technology and operations at RFG Advisory. “That’s why I believe at least once a year you have to review what you have. And review adoption, because some of these products have pretty low adoption rates.”

That’s why RFG Advisory uses a “one product per category” tech stack strategy, Hutchison says. For example, a CRM platform is used for all data reporting, which also has additional features if customization is needed.

However, Hutchison added that it is also critical for companies to constantly monitor vendor competition and have the “conviction to switch vendors” when it becomes clear that the existing adoption rate is not sufficient. He noted that a good adoption rate is generally at least 80% of a company’s core technology platforms.

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“That’s another hot potato because some people stick with a product just because it’s very difficult to change,” he said. But, “You definitely need to have a process in place to make sure you don’t have technical debt where you’re just paying for a piece of technology that nobody uses.”