Where does the Fe(III) ion go?
In solution, the iron(III) will be hexaaqua iron(III), 6 water molecules coordinating the iron ion, with the oxygen atoms being at the vertices of an octahedron.

Hexaaqua iron(III) has a high spin d5 electron configuration. 

All the d-d transitions are spin forbidden. 

Hexaaqua iron(III) is nearly colorless.