Tech for Tech's Sake Is 'No Good to Anyone': RIA Exec

Although technology has significantly improved over the past decade and "we've really made some great strides … it still seems to be something that a lot of folks in the audience struggle with," according to Bruckenstein.

"Whenever advisors think about making a technology decision, they're always a little bit nervous about it," he went on to say. After all, what happens if they end up making a bad decision?

Mistakes are bound to happen "when you blow up a firm and you build 2.0" of that firm, Heather Fortner, a partner, chief compliance officer and chief operating officer at Atlanta-based wealth management RIA SignatureFD, pointed out.

But she said her company learned a lot from the experience. For one thing, it's become "obsessive about whiteboarding" new ideas designed to address problems it's trying to solve, she noted, adding it's also important to have input from all the key players within the organization. If you do those things, it's more likely you'll be able to spot what any potential weaknesses are and what issues not only your firm, but those partnering with it, may run into, she noted.

In addition to the costs involved with technology, another challenge is that, although there are a lot of universities and programs that teach people how to become advisors, "there's really no training ground to create great back-office people and operations people," Bruckenstein pointed out. That's "very frustrating," he said, noting that, after all, "we're more and more dependent on" those types of experts. "It's something, as an industry, we should probably spend a little more energy on," he said.

Another potential cause for concern is the continued consolidation of fintech players. Although panelists were mostly upbeat about all the acquisitions in the industry, Bruckenstein said that for each one that worked out well, he could point to one that didn't.

While some large firms just buy smaller ones to kill off the competition, in other cases, the cultures of firms that have been bought "changed significantly … so that worries me," he said. In the case of Schwab's purchase of TD Ameritrade, he told the panelists: "If some of the TD technology were to go away, it would be a lot more disruptive to your firms than you are admitting to yourselves. … Because everything from the way they buy and sell to the way their workflows are — they're not the same. And so, your back-office ninjas are going to have to learn some new skill sets. And that's going to be disruptive and it's going to take some time." Bruckenstein previously expressed similar concerns to ThinkAdvisor.

What is "most worrisome" to him, however, is the "openness that TD has to those bleeding-edge vendors," he said, expressing concern that there may be a stifling of industry innovation among startups.

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