Customer Banker Relationship Essay

Advise Clive on the causes of legal action available to him and the chances of success with reference to relevant precedents.

I will form my argument by first determining if a customer banker relationship exists in this case, and if so the scope of this relationship. Also, we will define the bank’s financial advice duty and if the advice given is regarded negligent or misleading. Once we have determined this we will be in a good position to advise Clive if anyone is liable for the damages he has suffered and if he has any chance of success if he were to pursue legal action against Bank X or Paula.

Before entering into the argument it is important to note the facts of this case that will be considered throughout this paper

* Clive has banked with the Kensington branch of X Bank for the past 30 years

* Clive decided to invest his retirement money in government bonds

* Whilst at the bank Clive was told by the manager to seek professional advice before making any investment decisions

* Clive consults Paula the chief investments adviser at X Bank.

* Paula advises Clive to forget about government bonds as the return is too low and rather invest his money in Swiss Francs

* Paula’s only comment was “There is only one way they can perform – and that’s to outperform the investment market”

* Swiss Francs Slumped disastrously against the Australian dollar and Clive has lost substantially on that investment

The first thing that we need to establish is the kind of relationship Clive has with X Bank. A requirement of establishing customer banker relationship is that an individual must be classified as a customer. The information we have states that Clive has banked with X Bank for 30years and withdrew money from his account for investment purposes. It is reasonable to say given this information that Clive is indeed a customer, as some form of creditor/debtor relationship exists as Clive has an open account with X Bank. We can verify this...