Get the deal on energy brokers

How should retailers go about choosing an energy broker?

Arguably the best way of selecting an energy broker is to go on recommendation. Do any of your contacts use an energy broker and how do they feel about them? Do they feel they’re getting value for money?

If you can’t do it this way, perhaps selecting a broker from the Eon TPI Code of Conduct website could be a good start (www.tpicodeofpractice.co.uk). Only brokers who adhere to Eon’s code of practice appear on this site, meaning they have to abide by various standards.

Refrain from using online comparison sites for business energy. Many advertise themselves as ‘instant online prices’, but after you spend 10 minutes entering the information required, you receive a message saying “we’ll call you back with your prices” - far from ideal for busy retailers.

What practices should retailers look out for?

When speaking to an energy broker, watch out for misleading or pushy sales tactics. This is a key indicator that you’re speaking to a call centre-type brokerage, where the knowledge they have could be far inferior to a knowledgeable brokerage who really understands what you need.

If the brokerage wants to tie up the deal then and there take note of the prices and walk away. A reputable brokerage should be able to analyse your consumption and show you in writing the rates and how they compare with your current prices.

If a broker mentions the word “savings” make sure they are able to prove to you in writing how they arrive at their figures. A saving against what? Current prices, your renewal prices, out-of-contract prices? Get prices in writing.

What tactics should retailers be wary of?

Always take prices quoted only over the phone with a pinch of salt. Some brokers will only do verbal contracts, and this can cause issues if your supplier charges at the wrong rate. You’ll not have much to fall back on.

Retailers should also be wary of brokers disguising themselves as suppliers or ‘energy providers’. This is when the broker contracts with the supplier (with or without the supplier’s knowledge) and in turn recharges the end user. This puts the end user (you) in an awkward position. You’re contracted with a company to buy energy, but they aren’t licensed by Ofgem, and can have detrimental terms. Always ensure that any contract offered is with an Ofgem-licensed energy supplier. A full list of electricity licensees can be found at www.ofgem.gov.uk/publications-and-updates/list-all-electricity-licensees-registered-or-service-addresses.

What fees should or shouldn’t be charged?

If any broker claims their services are “free” put the phone down and use someone else. Energy brokers are businesses and aren’t free. Yet how they charge for their services can vary.

It’s quite normal for a commission to be built into the prices you are quoted and will ultimately pay to the energy supplier. You can ask brokers how much this charge is.

What they shouldn’t do is mislead you into how this fee is charged and should state that a commission is built into rates. Some brokers charge directly, but it may require signing an exclusive contract, removing your ability to compare prices.

What is the standard form of communication between retailers and brokers, and how often should it take place?

It’s common for brokers and customers to speak on the phone or via email without meeting in person, mainly due to costs. However, if they’re local ask them to come and see you if that’s what you want, perhaps they’ll say yes.

There’s no hard and fast rule as to how often customers and brokers should speak, but at the very least if you have a problem the broker should be your first port of call.

If when calling that broker they pass off the problem to the supplier, or say you’ll have to deal with the issue yourself, then you’ve picked a bad one. Don’t use them again, and don’t recommend them. Any broker should be willing and able to help fix issues.

A reliable energy broker will also be proactive, monitoring market changes to ensure that clients are protected. They should keep you up-to-date with changes and recommendations as they occur.