New to Fidelity Platform – A Few Questions…

bpk101

I’ve just opened a JISA with Fidelity UK and whilst i’ve done a ton of research on the fund i'd currently like to invest in and the platform i want to use, now that i’ve come to make my first investment i’m a bit unclear as to what the actual process is from adding cash to the account and how it’s used to buy regular funds and how long that typically takes. I was hoping someone who uses Fidelity might be able to help explain.

I opened the account in my name (on behalf of my 2 year old son) by setting up a monthly DD from my personal bank account. In addition to the DD i also manually transferred £200 from my personal account (just to get an investment underway as i wait for the monthly DD to take effect).

The £200 cash transfer registered in the JISA as ‘cash available to invest’ which i immediately used (100% of) to buy investment in the fund i’ve chosen to invest in once the DD (regular saving plan) is up and running.

However, both the £200 ‘cash in lump sum’ and the subsequent fund purchase from 4pm yesterday (18/08/21) are still showing as ‘pending transactions’ which raised a few questions…

1. The ‘cash in lump sum’ shows a settlement date of 23/08/21. Does this mean it takes 5 days for any cash transfer to clear before it can actually be used to purchase the fund i’ve 'invested in' and have it register in the JISA account as an investment?
2. Will the purchase price of the fund reflect the price as of 18/08/21 (day of investment) or that of 23/08/21 (settlement date)?
   
3. The fund purchase itself (Vanguard ESG Developed World All Cap Index) looks to be reflected by two currently pending transactions, a ‘Buy’ transaction type (£200) and a ‘Cash Out For Buy’ transaction type (-£200), neither of which have a settlement date currently listed. What is actually happening here, is the cash waiting to be bought before it can be used to buy the fund? Again i'm new to this and it would be good to understand the process currently underway and when i can expect to see the investment reflected in my sons JISA account. 

Screenshot of the current transaction overview...

Thanks. 

Alexland

You will be buying into the fund at the next valuation point after Fidelity have sent the order and the Vanguard daily cut-off time for receiving orders each day. As you have made the order there is a cash transaction to remove the money from the account to stop you ordering something else with the same money. Depending on exactly when you placed the order yesterday you will probably get the fund at either today or tomorrow's price. The pending order will change status from "Ordered" to "Priced", the fund holding will show in the account and then a few days later move from the "Pending" to the "Historic Transactions" tab.

Albermarle

As above , it is all normal , just be patient .
It is nothing related to being with Fidelity , it is just the way funds are purchased.
 
Unlike buying investments directly in the market ( like shares ) with funds you do not know the price , when you place the order .You only know the latest price but not the one that your order will go through at. 
Over the long term and with regular investing, this will make no difference to your final result. 

Alexland

Albermarle said:

It is nothing related to being with Fidelity , it is just the way funds are purchased.

One thing I would say that is that Vanguard's funds always seem to take longer either on their own Vanguard Investor or via another platform such as Fidelity as they tend to have both an early dealing cut-off and a late valuation point.

When I have invested in Fidelity's own funds on their own platform I have placed an order in the mid morning and seen the fund priced and in/out the account by the afternoon so you roughly know at what value you are trading the US market at as the valuations tend to be before it opens. Still you need to think about exchange rate movements so it's hard to be too precise. I am sometimes naughty and look at the US futures before placing a big fund order.

DireEmblem

It is quite normal for most funds to have a settlement of T+3 or T+4.  This gives the managers of the fund time to buy stocks or sell stocks in the market to avoid overdraft charges and give time to manage the funds cash.  Stocks normally trade in the market on a T+2/T+3 basis.  I think Vanguard is T+3 but the documents you read will confirm.

In terms of your questions:

1 Im not sure what transfer you used, or why it takes 3 working days.  It won't stop you trading as long as the security you are purchasing has a settlement cycle of at least T+3.

2 The price will be at the date the trade was confirmed, not the settlement date.  This will depend as at what time on the 18th you placed the trade.  The fund documents you read about the fund should confirm, but IIRC, the trade cut off point is 1200GMT, so as long as you placed your trade before this, you should get the trade price for the 18th.

3 I dont think your trade has been confirmed yet.  The valuation point I also think for Vanguard is a bit weird - IIRC 2100GMT.  


The settlement date will be confirmed once your trade details and price of the fund on the date are released.

bpk101

DireEmblem said:

Im not sure what transfer you used, or why it takes 3 working days.

Lloyds debit card transfer via my Fidelity JISA accounts Manage Transactions >> Add Cash page. The transactions are still showing as pending within my Lloyds app too.

DireEmblem said:

It won't stop you trading as long as the security you are purchasing has a settlement cycle of at least T+3.

The funds factsheet shows settlement as T+2.

DireEmblem said:

the trade cut off point is 1200GMT, so as long as you placed your trade before this, you should get the trade price for the 18th.

It was after... at around 1600GMT approx. 

bpk101

Am i right in thinking that 'regular saving plans' set up in Fidelity can be assigned to invest in particular funds automatically, but any individual cash deposits (e.g. gifts from family) remain in the JISA as cash until i manually invest it each time?

Or can cash deposits also be set up in a way that they automatically invest themselves into pre-chosen fund/s?

MX5huggy

Once you own a fund you’ll probably find you can click on that fund and then click buy (more) bash in your card details and 2 or 3 days later you’ll own more. 

BTW right now the longer this buy takes the better, markets are down so far this week so you’re getting more units for your money.

cloud_dog

We use Fidelity and I have to be honest, the way they structure the presentation of the specific actions relating to a buy (for example) is logical but in an overly convoluted fashion in my opinion, and I've been investing for donkeys years using numerous platforms and various investment types.

As a comparison, I see no complexities when I buy using AJ Bell or iWeb.

bpk101

MX5huggy said:

BTW right now the longer this buy takes the better, markets are down so far this week so you’re getting more units for your money.

That did cross my mind actually.  

Still no movement on the transaction as of 930GMT this morning. I find it strange that the outgoing cash from my Lloyds current account still shows as pending as well, 2 days later.

I’m currently abroad (Germany), wonder if that’s made a difference? 

Albermarle

cloud_dog said:

We use Fidelity and I have to be honest, the way they structure the presentation of the specific actions relating to a buy (for example) is logical but in an overly convoluted fashion in my opinion, and I've been investing for donkeys years using numerous platforms and various investment types.

As a comparison, I see no complexities when I buy using AJ Bell or iWeb.

It is a function of the different software they use I presume .