Energy broker or consultant? How to choose the best one for your business

Most UK businesses buy their gas and electricity through a broker or consultant, also known as a third party intermediary (TPI). The best ones save you time, money and risk. Others can steer you towards the contract that pays them most, build a high fee into your unit rate and go quiet until the next renewal.

The difference is not always obvious from a website. Here is what to check, the questions to ask and the warning signs to look out for.

Broker or consultant: what is the difference?

The two words are often used to mean the same thing, and Ofgem treats them the same way: both are third party intermediaries. In practice there is a difference in approach.

• An energy broker usually focuses on the transaction: collecting quotes at renewal and placing the contract, typically paid by commission.
• An energy consultant usually advises on the whole picture: when and how to buy, contract risk, metering, bill checking, compliance and schemes, and stays involved for the life of the contract.

Many firms do some of both, so look at what they actually do rather than what they call themselves.

Which do you need?

If you have one or two small sites and simply want a competitive renewal, a good broker may be all you need. If you have several sites, higher consumption, on site generation, a flexible or risk managed contract, or compliance obligations, you are likely to get more value from a consultant who advises before, during and after the contract.

1. Check they are signed up to a dispute resolution scheme

Since December 2024, Ofgem rules have required energy suppliers to only work with brokers that are members of a redress scheme when securing contracts for small businesses. The Energy Ombudsman runs one such scheme. It means that if something goes wrong and the broker cannot put it right, you can take your complaint to an independent body, free of charge if you are eligible.

Ask for their ADR reference number and check it. A good adviser will also publish a clear complaints procedure on its website.

2. Ask exactly how they are paid

Most brokers are paid commission by the supplier, built into your unit rates or standing charges. Some charge a fixed fee instead. Neither is wrong, but you should know the amount before you sign.

For contracts signed since October 2024, Ofgem rules require the principal terms of every business energy contract to show any broker fees. A good adviser will tell you the figure up front, in pence per kWh or pence per day, not wait for you to find it in the small print.

Ask: how much will you earn from this contract, and does that change depending on which supplier or contract length I choose?

3. Make sure they are independent

Some brokers have targets or volume deals with particular suppliers. That can steer the recommendation, even without anyone meaning it to. An independent broker is not tied to any supplier and has no sales targets to hit with any of them.

Ask: do you have any targets, exclusivity or volume agreements with suppliers?

4. Ask how many suppliers they compare

Be wary of anyone who claims to cover the whole market. Very few brokers have agreements with every supplier, and some suppliers do not work with brokers at all. What matters is that the panel is broad, relevant to your size and type of business, and that the broker is open about who is on it.

5. Look for advice, not just a price

The cheapest unit rate on the day is not always the best contract. A good adviser will talk to you about:

• When to buy. Prices move every day. Starting your renewal six to twelve months early gives you room to choose your moment.
• How to buy. Fixed, flexible or a mix, depending on your size and appetite for risk. See fixed or flexible.
• What is in the contract. Pass through charges, volume tolerances, termination terms and what happens at the end.
• Everything around the contract. Metering, data, bill validation and government schemes such as climate change levy relief or BICS.

6. Read what they ask you to sign

Most brokers will ask for a letter of authority (LOA) so they can request your data and quotes from suppliers. That is normal. Check what it allows them to do, how long it lasts and whether it gives them exclusivity. A good LOA is short, clear and lets you stay in control of the decision.

7. Find out who you will actually deal with

Will the person who wins your business be the person who looks after it? Ask who manages the account after the contract goes live, who checks your bills and who you call when something goes wrong.

Warning signs

• They will not tell you how much they earn, or say it is "free".
• They claim to cover the whole market or guarantee the cheapest price.
• They pressure you to agree on the call, or say the price is only valid for the next hour.
• They suggest they are calling from your supplier.
• They ask you to sign a contract you have not seen in writing.
• They have no complaints procedure and no ADR reference.

Ten questions to ask any energy broker or consultant

1. Which dispute resolution scheme are you registered with, and what is your reference?
2. How are you paid, and how much will you earn from my contract?
3. Does your fee change depending on the supplier or term I choose?
4. Do you have targets or exclusive agreements with any supplier?
5. Which suppliers do you compare for a business like mine?
6. Should I fix, go flexible or do something in between, and why?
7. What does your letter of authority allow you to do, and for how long?
8. Who will manage my account after the contract starts?
9. Do you check bills and help with billing disputes?
10. Where can I read your complaints procedure?

How Energy Planner answers them

Energy Planner is an independent energy consultancy. We advise on the whole picture and arrange the contracts too. We are not tied to any supplier and have no supplier sales targets. We compare quotes across a broad panel, disclose our commission or fee at quote stage in pence per kWh or per day, and show it on every contract. We are registered with the Energy Ombudsman (ADR reference C35ENER125), publish our complaints procedure and explain how we are paid in full. You deal directly with the person advising you, from the first benchmark to renewal, and the decision is always yours.

Frequently asked questions

Is it cheaper to go direct to a supplier?

Not necessarily. Going direct means comparing suppliers yourself, and a direct price is not always lower. A good adviser compares several suppliers at once and tells you what is included in the rates.

Do energy brokers and consultants charge a fee?

Most are paid by commission from the supplier, included in your rates. Some charge a fixed fee. Either way, the cost should be disclosed to you before you sign.

Are energy brokers and consultants regulated?

Brokers are not yet licensed by Ofgem, but suppliers must follow Ofgem rules on how they work with brokers, including showing broker fees in your contract and only using brokers that belong to a redress scheme for small business contracts. The government has said it intends to bring brokers under formal regulation, and voluntary codes of practice already exist.

Can a broker guarantee the cheapest price?

No. Prices change daily and depend on your usage, meters and contract terms. A good adviser will show you the options side by side and explain the differences, rather than promise the lowest price.

This guide is general information, not advice for your specific circumstances, and is correct to the best of our knowledge at the date of publication. Rules can change, so it is worth confirming the current position with Ofgem or the Energy Ombudsman. Sources: Ofgem, greater protection for businesses, Energy Ombudsman.