Editor's note: Ravi Raju, Head of Asia Pacific, Deutsche Bank Private Wealth Management(PWM) speaks about the challenges that the wealth management industry faces and how he remains optimistic about doubling the size of Deutsche Bank PWM’s business over the next two years.

Continued...

To see the first half of his comments, click here.

Mapping out the investment landscape for the rest of 2011

In Asia, the high and rising inflationary pressures have been the key concern for markets. The monetary tightening process is well under way in many Asian economies, however we are expecting more possible interest rate hikes from Asian central banks in efforts to control inflation.

While inflation would likely remain a big concern for some Asian economies in the immediate term, we think that the building inflationary pressures could probably peak at around mid-year before stabilizing and gradually falling in the second half of this year.

In the Euro area, while near term political headwinds may continue to challenge the magnitude and scope of the European Financial Stability Fund, we expect the European Union (EU) to eventually move towards a more comprehensive crisis resolution mechanism. Although there still seems to be uncertainty regarding the precise details of what the EU will ultimately adopt, the current proposals under consideration provide further confirmation of the resolve of European policymakers to find a solution.

Some other potential risks that investors should look out for this year include the timing and speed of monetary policy exit, fiscal policy decisions as well as the outlook for budget deficits and debt of the G7 economies. Having said that, while we need to closely monitor the risks, we are also aware that investment opportunities exist for investors. To this end, investors should constantly re-look at their portfolio real returns after adjusting for inflation and review their investment holdings, so as to position their portfolios well for prevailing market conditions.   

Outlook for Asia Pacific’s private wealth industry

The Asia Pacific wealth management market has experienced strong gains in recent years and should continue to do so in the next few years. Growth should be fuelled by China and India as their economies continue to race ahead.

In a fast growth environment, where regulatory reform continues to open up new investment opportunities and investors become much more sophisticated in terms of capital markets knowledge, successful private banks will be those which are at the forefront of new product trends, have invested in asset allocation and portfolio management technology, and have invested in their people. 

To this end, Deutsche Bank PWM would generally be looking forward to even more favourable regulatory changes in the near future – not just in terms of the requirement that clients fully understand what they are buying, but also that private banks operating in the region impose some form of self regulation to ensure that certain industry professional minimum standards are complied with. Put simply, it is imperative that banks adapt their business models to comply with increasingly administrative regulatory demands without compromising client service.

We have also witnessed an increasing demand from Asian entrepreneurs to serve their enterprise and personal wealth. Deutsche Bank PWM will continue to broaden its wealth management, creation and succession services and product platforms by working closely with its investment bank and provide private clients with the best in class institutional and private banking products across all asset classes.

Ultimately, private banking is still a relationship-based service. Having sophisticated bankers with the skill-sets required to meet the complex needs of clients has now become even more important than ever. At Deutsche Bank PWM, I believe we possess a best-in-class operational risk management platform and continually strive to achieve and adhere to a globally relevant set of standards. This re- emphasizes the trend around “Flight to Quality” that has seen higher asset inflows into our business.

Ravi Raju is the Head of Private Wealth Management (PWM) for Asia Pacific at Deutsche Bank. He was appointed to this position in March 2007. As Head of Asia Pacific, Ravi is a member of the Global Executive Committee for PWM.

Based in Singapore, Ravi sets the strategic direction of the PWM business in the region. He oversees the PWM franchise of over 680 staff located in 14 offices across nine countries in Asia Pacific. He has responsibility over four sub-markets within Asia Pacific: North Asia, Onshore (offices in Australia, China, India, Indonesia, Japan, Taiwan, Thailand), Southeast Asia, and Global South Asia covering non-resident Indians (offices in Dubai, Geneva and London).