Why Your Energy Broker Might Not Be Working for You

Your Energy Broker Is Paid by Your Supplier. That’s Not a Conflict of Interest — Unless They’re Not Disclosing It Properly.

There are approximately 3,000 registered Third Party Intermediaries (TPIs) operating in the UK business energy market. Some are sophisticated independent consultancies with decades of market experience, robust supplier panels, and a genuine commitment to securing the best deal for clients. Others are lead generation operations that take the highest commission available from whichever supplier will pay it, dressed up in the language of independent advice.

The structural challenge for UK business owners is that from the outside, these two types can look identical. They both offer to compare the market, obtain quotes from multiple suppliers, and recommend a contract. The difference is in what’s driving the recommendation — and whether the broker is transparent about it.

Ofgem introduced the TPI Code of Practice to address exactly this problem. Understanding what it requires — and how to test whether your broker is complying with it — is the difference between working with someone who genuinely serves your interests and paying a commission to someone who serves their own.

How Energy Broker Commissions Work

The standard energy broker compensation model works as follows: when a broker arranges a contract between a business customer and an energy supplier, the supplier pays the broker a commission. This commission is embedded in the unit rate charged to the customer — the supplier quotes a “broker uplift” on top of the wholesale-derived rate, and the broker receives this uplift over the duration of the contract, typically as a periodic payment.

The commission structure means several things in practice:

Brokers are incentivised by volume and margin, not necessarily by the best deal for you. A broker who recommends a supplier paying a 0.5p/kWh uplift earns more than one who recommends a supplier paying 0.3p/kWh, all else equal. If the 0.5p/kWh supplier also happens to be the best deal for you, there’s no conflict. If it doesn’t, but that’s the recommendation you get, there is.

Longer contracts generate more commission. A broker who recommends a 36-month contract earns three times the annual commission of a 12-month contract, for the same unit rate uplift. If you didn’t need a 36-month contract — if a 12-month contract would have served your interests better given your circumstances — the length recommendation may have been influenced by commission economics rather than your needs.

Restricted panels benefit brokers who hold preferred supplier arrangements. Some brokers have preferred supplier agreements that provide enhanced commission from specific suppliers in exchange for volume commitment. A broker with a preferred supplier arrangement has a structural bias toward recommending that supplier, which may not align with the competitive market outcome you’d obtain from a genuinely unrestricted panel.

What Ofgem’s TPI Code Requires — and What to Look For

The Ofgem TPI Code of Practice, which registered TPIs commit to as a condition of operating in the market, requires brokers to:

• Disclose commission: Brokers must tell you that they receive commission from suppliers and must be able to tell you the commission amount or rate upon request. You are entitled to know exactly how much your broker earns from your contract.
• Act in your best interest: Recommendations must be based on what is most suitable for the customer, not what generates the highest broker income.
• Provide transparent quotes: The rate presented to you must be clearly derived and not misrepresent the structure of charges.
• Maintain an adequate supplier panel: Brokers must access a sufficient range of suppliers to genuinely compare the market — they cannot credibly claim to compare the market from a panel of two or three suppliers.

In practice, the test of compliance is straightforward: ask your broker, directly, how much commission they receive on the contract they’re recommending. A compliant, ethical broker will tell you without hesitation. An evasive or vague response — “it’s built into the rate,” “we’re paid by the supplier, not you,” “we don’t disclose specific commission figures” — is a red flag.

The Supplier Panel Question

The single most useful question you can ask a broker who presents you with a contract recommendation is: “How many suppliers did you approach for this contract, and which ones declined to quote?”

A broker who has accessed 15–20 suppliers and obtained multiple competing quotes, and can show you the comparison, has done the job. A broker who presents a single quote and calls it “the best available” has either not accessed the market properly or has reasons for the single-supplier recommendation that may not be entirely client-driven.

The breadth of a broker’s supplier panel is a direct indicator of the quality of their market access. Telnergy works with 21+ active suppliers across the UK non-domestic market. We access the full competitive market for every contract we recommend. If you’ve ever received a single-supplier quote from your energy broker and been told it’s the best available, it’s worth asking how they know.

Signs Your Broker May Not Be Acting in Your Best Interest

Beyond the commission and panel questions, here are specific patterns that suggest a broker relationship that isn’t serving you properly:

They contact you only when your contract is about to expire. A good energy broker is monitoring your contract, market conditions, and renewal timing proactively — not just appearing at renewal time to earn another commission. Annual-or-less contact suggests a transactional relationship focused on contract churn rather than ongoing value.

They don’t ask about your consumption profile, operational hours, or site characteristics. Energy procurement advice that doesn’t account for your specific consumption pattern — your peak demand, your seasonal variation, your site profile — is generic advice, not specific advice. It may not be wrong, but it isn’t tailored.

The contract length always seems to match what generates the most commission. If you’re consistently being recommended 36-month contracts regardless of market conditions, that’s worth examining. In some market conditions, longer contracts are the right advice. In others, shorter contracts are. The recommendation should change with conditions.

They can’t explain the non-commodity charges in your bill. An energy broker who focuses exclusively on the unit rate and can’t explain or discuss the network charges, levies, and taxes that make up 55–65% of your electricity bill is providing a narrower service than the one you need.

You’ve never been told about your auto-renewal deadline. If your broker has managed your contract and has never explicitly flagged the date by which you need to act to avoid auto-renewal, they are managing the relationship in a way that benefits from your inaction.

What Independent, Transparent Advice Looks Like

Telnergy has been operating in UK commercial energy markets since 2002. We are an Ofgem registered TPI (ADR Ref E3561). We disclose our fee on every contract we arrange — agreed upfront, and paid directly or via the supplier. We access 21+ suppliers for every comparison. We flag renewal deadlines proactively and maintain ongoing relationships with clients, not just renewal-cycle relationships.

We tell you this not to recite credentials, but because it sets a clear standard for what independent energy advice should look like. If your current broker can’t describe their service in similar terms, it’s worth comparing.

📱 WhatsApp Business: 07360 272168

📧 Email: hello@telnergy.com

📞 Direct line: 01202 028888

Telnergy Limited · Independent commercial energy consultancy since 2002 · Ofgem registered TPI · ADR Ref E3561 · CRN 04576876 · Christchurch, Dorset