FIIG seem to have a permanent "advertorial" in The Weekend Australian with Elizabeth Moran's weekly missive on retail bonds. I engaged with FIIG to broaden my SMSF's investment portfolio and I have to say it was not a good experience.
If you recall the way shares were sold decades ago, particularly if you didn't have access to a full registered broker: you knew which company you wanted to invest in but had no idea about up to the minute pricing trends, market depth, or even company news. Buying bonds through FIIG is much like that today: they will recommend bonds for you to buy but, unless you do a hell of a lot of work yourself (where you can) you just really do not know the "profile" of the bond being recommended - the buy price, the position the bond is in the pricing/demand cycle, the premium paid for the bonds between coupon dates are all a mystery until the acquisition goes through. Similarly, if you sell the bonds, you have absolutely no idea of what the realisation price is until its sold - ie, no feed back on the demand or price in real time at all. Not many people I know would give someone permission to sell an asset without knowing or caring what the sell price is!
While FIIG make money on the spread they have now retrospectively decided to charge punters the "administrative cost" of holding the bond certificate for you. No, there is no option for you to keep and store that piece of paper, you just have to pay. Its not cheap: a minimum if $240 per year, but generally 0.2% for the first $500k invested, so further eroding your stable income.
For all the marketing that FIIG, suggesting bonds are less volatile than shares, higher on the creditor's list if the company goes bust, and having superior returns to unsecured notes, all that is lost to the investor because of the lack of transparency in the investment and the inability to have any real control on the process.
I am out with a minor loss but a hard-earned lesson, and I warn others to very carefully consider before getting in. As always, do your homework.
