It's a great idea. However, let's not understate the risks with investing in corporate bonds.
It's interesting to read the risk statements that the regulator has made them put on their website. These are not for the average retail investor.
There have already been a few bonds that they sold that have gone badly - New Look, House of Fraser being some big ones that have been through debt restructuring, with debt write-off or conversion.
I would worry about a company claiming that bonds offer higher reward than equities with less risk:
"It’s worth remembering that since many corporate bond issuers are FTSE 250 size companies, many have issued both bonds and listed equity so both provide exposure to a similar set of companies. From this perspective, bonds offer less risk and more reward."
Not every entity in the chain seems to be regulated, the custody arrangements seem opaque.
I thought it was strange to have a company registered in the British Virgin Islands...
The company structure creates an added credit risk - you're not actually buying the bonds, but notes issued by an unregulated entity that holds the bonds. Assuming everything is above board, if the issuing entity was liquidated, the bonds would be sold immediately in the market. No option to hold to maturity in a distressed bond.
The fees quoted are a flat 1% which also seems reasonable, I wonder if there are any hidden fees
1% on a 4% bond is chunky enough.
In terms of hidden fees, you're not actually getting the same yield as the market. I checked a few of the big ones where it's easy to get a live market price, and they're materially different. The platform is obviously taking a margin, but it's not very transparent.
Which gets to another point - you're at their mercy in terms of pricing if you need to sell before maturity. They offer a secondary market, but there has to be a buyer available.
I'd love to see how it stacks up against a bond fund in terms of fees. (can't compete on diversification, liquidity, and regulation)