A ferromagnetic powder composition is described comprising soft magnetic iron-based core particles, wherein the surface of the core particles is provided with a first inorganic insulating layer and at least one metal-organic layer, located outside the first layer, of a metal-organic compound having the following general formula: (R1[(R1)x(R2)y(MOn-1)]nR1, wherein M is a central atom selected from Si, Ti, Al, or Zr; O is oxygen; R1 is a hydrolysable group; R2 is an organic moiety and wherein at least one R2 contains at least one amino group; wherein n is the number of repeatable units being an integer between 1 and 20; wherein the x is an integer between 0 and 1; wherein y is an integer between 1 and 2; wherein a metallic or semi-metallic particulate compound having a Mohs hardness of less than 3.5 is adhered to at least one metal-organic layer; and wherein the powder composition further comprises a particulate lubricant. A process is additionally provided for producing the composition and a method for the manufacturing of soft magnetic composite components prepared from the composition, as well as the obtained component.