Which of the following is an example of an ancillary service?

Ancillary services refer to additional services that complement primary activities within the financial services industry but do not primarily involve the core operations of the business. For instance, safeguarding and administering investments directly supports the management and protection of client assets. This process involves functions such as custody services, ensuring the assets are safe, and managing the logistics of how those assets are maintained and tracked.

On the other hand, managing client investments is considered a primary service, as it directly involves making investment decisions on behalf of clients. Arranging insurance contracts represents another primary service, focusing specifically on securing insurance products rather than supporting investment services. Discussing investment risks, while an important aspect of the advisory process, aligns closely with the direct advisory duties rather than providing a supportive, ancillary function.

In summary, safeguarding and administering investments is an ancillary service because it enhances the overall investment management process by focusing on the secure and efficient handling of assets rather than directly managing the investments themselves.