Wow, she's recommending you start formula at 1 year of age? I've honestly NEVER heard of that before. Cow's milk, yes. Goat's milk, sure. But formula at a year? No. I think that your doctor is misinformed.
There is a plethora of things you can do to help your daughter gain weight. Increasing her intake of solids is first on that list. Include things into her diet that are high in fat such as full fat yogurts/cheese, avocados etc. Offer solids more often throughout the day. Full fat cows milk (I've seen as high as 3.8% organic homo milk here) should help too, if you're okay with introducing it. There is NO reason to stop breastfeeding and I'm glad your doctor sees it that way as well. There is no more fat in formula than there is in breastmilk. However adding more solids and some full fat milk into her diet could give her the calories she needs to get to her weight potential (to me, that is the weight she is with proper balanced nutrition).
Giving formula at this age would be silly for the following reasons:
-It's VERY expensive
-It has the same amount of fat calories as breastmilk and whole cow's milk
-Your daughter will probably hate it
Also, keep in mind (as I'm sure you are) that she's likely just a smaller kid. nothing wrong with that. Of course any drop on the weight charts is a cause for concern and it should be investigated to make sure that there is nothing wrong. If increasing her solids, offering higher fat foods, introducing cows milk and continuing breastfeeding are all being done, and her weight is still dropping off, then I would be concerned (and STILL formula would NOT be the answer). However don't be surprised if with all those measures her weight still is in the 5th percentile. If that's her weight potential, then going over it would be making her overweight and that's not what we want either.