What is required for acceptable practice when advising clients?

The requirement of applying due diligence and being transparent is essential for acceptable practice when advising clients. Due diligence involves thoroughly investigating and analyzing the information relevant to the client’s situation, which ensures that the advice given is based on accurate and comprehensive data. This practice fosters trust between the advisor and the client, as it demonstrates the advisor's commitment to the client’s best interests.

Transparency is equally important; it enables open communication about the processes, potential risks, and the rationale behind the recommendations provided. This openness helps clients make informed decisions, creating a more ethical advisory environment.

In contrast, relying solely on verbal recommendations lacks the documentation and accountability that due diligence requires. Avoiding discussion of fees can lead to mistrust, as clients deserve clarity about financial obligations. Providing only positive outcomes does not present a realistic picture of the possible results, which could mislead clients about the risks involved in their decisions.