Child benefit.
As LM said, ds gets more CB than dd, but IMO the fairest way is to split the total equally between the 2. YOu should get your CB paid into your account, and then set up direct debits to pay it into accounts for each of the children on a monthly basis (Though you have to x 52/12 to get a monthly figure as CB is paid 4 weekly but most banks prefer monthly DD's.) If you are sure you want to continue invetsing it in cash it will be counted as theirs until the annual interest reaches £100 (which would need a balance of £2,000).
Personally I would switch this to an equity investment as you are looking at a 13 year term at least and over the long term, equities usually outperform cash. You could also add your £50 ISA investment to this money and make one payment each for them per month - most providers will accept a minimum regular payment of £50.
Fidelty will assume you want to continue with your £50/month into an ISA each year until you tell them different. But IMHO you should not really be investing for them in an ISA - this means that you cannot invest for yourself in an ISA. And you should be doing that - even if you canot afford regular payments into your own investment account any cash savings that you have should be in a Cash mini ISA (up to £3,000 a year). ISA's offer 2 forms of tax relief- income tax relief (although this is limited now since the abolition of the dividend tax credit) and CGT. For a long term investemnt I would always recommend investing in a unit trust that is managed for growth rather than income, and therefore you don't get any dividends, so the ISA wrapper is worthless. And by investing in a unit trust in yourname but designated for each of your kids, you can transfer the investment to them when YOU want to and under current IR rules it will be counted as being transferred at cost. They would therefore be liable to CGT on any profits made on it, but would have their own annual allowances to offset each year (£8,200 last year). So unless they had done really well, tax should not be a problem.
As to the appropriate investment.... you need to look for a fund managed, as I said, for growth. UK smaller companies are looking particularly attractive at the moment, or you could follow my example and invest in a sector such as biotech or health, which has excellent long term growth prospects, or even invest in an Asian Growth or emerging markets fund. Because of the time frame, you can afford to look at slightly riskier investments like this rather than safe but boring UK Blue chip or tracker (because a tracker follows markets down as well as up) and because you are making monthly investments, you benefit from pound cost averaging -which means that when prices of your holdings go down, rather than being a bad thing (any loss is just paper until you come to sell), it's a good thing as it means your £50 a month buys more units.
CTF - personally we have gone for cash - this is because the charges on the equity funds are appalling for what are usually very basic tracker or blue chip stocks, where tbh, a monkey has as much chance of outperforming. I don't mnd high charges (hell they are what pay dh's bonus) but I do want to get something other than a computer programs stock selection back in return. HANLEY ECONOMIC BS have the best rate at the moment (again, check moneyfacts)
I honestly wouldn't bother with an IFA for what you want - it's just another layer of charges. YOu can look on www.moneyfacts.co.uk for performance tables for units trusts, or just read the financial pages in the Sunday newspapers.
But please note that I am not qualified to give financial advice to non sophisticated investors (that means you are not a financial comapany, not that you are not a sophisticated person btw )