Energy broker tricks of the trade

Whether it’s energy, insurance or even mega-yachts a good broker will represent your interests well and charge a fair fee according to the amount of work involved. But, as is the case in many areas of business, there are good energy brokers that deliver value for money and bad ones that don’t. So here are a few pointers that will hopefully help.

You don’t use a broker, you do it all yourself

Well I would say this wouldn’t I? But there are so many twists and turns, even with so called fixed price contracts, that the advice of somebody who regularly works in this area can be worth every penny.

Tip – if the price offered by one supplier is notably less than the others it is usually because there is something not included in their headline price that will still end up on your bill.

You use a broker but you don’t pay them anything yourself

In this case the broker, or TPI as they are sometimes known, earns a commission on the energy contracts they have negotiated for you. This can be fine but bear in mind that they tell the energy supplier how much commission to add to your bill. The ‘best deal’ that they get for you may well be cheapest offer made by an energy supplier, but the commission added might be another story.

Tip – ask your broker how much commission is added to your energy bills across the entire term of the contract. Also ask them for written permission to ask your energy supplier how much commission is added to your invoices. If they try to delay or avoid responding, you have your answer; it’s a lot!

You use a broker and pay them a fixed fee for the work they do

This is by far the most transparent way of working. But it has been known for some brokers to charge a fixed fee and a commission!

Tip – ask your broker for written permission to ask your energy supplier how much commission is added to your invoices. If they are reluctant to do this, it might just be that they are being paid twice.

I work on a fixed fee, zero commission basis. To make this clear, the Letter of Authority that you need to sign (so that energy suppliers know I am working for you) will explicitly state ‘zero commission to be added’.

Whichever way you buy energy, even if you just want to check that you are on track, give me a call.