MenuFAAA Principles of Good Professional Practice
Stage 4 - Identifying suitable strategies and developing recommendations
Stage 4 of the financial advice process – Identify suitable strategies and develop recommendations – is where advisers turn analysis into action. At this stage, you explore different strategies that could help the client meet their goals, evaluate which ones are most appropriate, and then build tailored recommendations based on those strategies17.
You use your professional judgement to identify products or services that support the plan, making sure they align with the client’s needs. Finally, you present your recommendations clearly, explaining the reasoning, risks, and how they fit the client’s situation—so the client can make informed decisions with confidence.
The FAAA Principles of Good Professional Practice booklet is also available to download.
Outcomes
1. Identify and evaluate financial advice strategies
- Identify viable strategies that could reasonably meet the client’s confirmed objectives, including making no changes to the client’s existing financial strategy or situation.
- Assess each strategy’s suitability based on client needs, priorities, and circumstances.
2. Develop financial advice recommendations
- Build recommendations from selected strategies that align with the client’s goals.
- Consider if changes to existing strategies are required to achieve client’s goals. Only recommend changes if the benefits of changing outweigh the costs of doing so.18
3. Identify appropriate products and services
- Select products/services that support the recommended strategies.
- Be satisfied that you fully understand their features, risks, and benefits before recommending, including the risks of recommending a new product generally.
4. Present recommendations clearly
- Explain rationale, assumptions, and risks in a way the client can understand.
- Help the client make informed decisions and disclose any conflicts of interest.
5. Document and disclose
Provide recommendations in writing or durable format.
Include all relevant details such as objectives, strategies, products, risks, fees, and any third-party benefits.
The FAAA Principles of Good Professional Practice booklet is also available to download.
17 FPSB Standards 10, 11, 12, 13, 14, 15
18 RG175.282(b)
Please note
These principles are intended as a foundation on which advisers can develop their own approach to best practice. This guidance is not exhaustive and is not intended to prescribe how advice must be provided. It outlines principles of good practice and the outcomes they are intended to achieve, rather than specific actions.
Advisers must apply their own professional judgement when using this material, taking into account the needs and circumstances of their clients, relevant legal and regulatory obligations, and any licensee requirements.