Energy brokers in the UK non-domestic market operate inside a regulatory gap that has lasted over a decade. The Financial Conduct Authority does not regulate energy brokers because energy is not a regulated financial product. Ofgem regulates suppliers, not the Third Party Intermediaries (TPIs) sitting between supplier and customer. The 2026 reform timeline is changing this, but slowly, and the practical risk for SME buyers in May 2026 is still real.
TL;DR
- The FCA does not regulate non-domestic energy brokers, because non-domestic energy supply is not a regulated financial activity under the Financial Services and Markets Act 2000.
- Ofgem's microbusiness Standards of Conduct, updated in 2022, catch some broker behaviour indirectly by binding the supplier on what a broker can do on its behalf.
- The 2024 Non-Domestic Market Review opened a formal consultation on TPI rules; statutory rule-making continued through 2025 and into 2026, with commission disclosure and complaint handling through approved ADR among the proposed in-scope items.
- Citizens Advice has reported broker mis-selling as one of the larger complaint categories in non-domestic energy advice work over the past three years.
- The catch is the Letter of Authority: a broadly drafted LOA can let a broker sign contracts, accept renewal offers, and act for the customer in ways the customer did not consciously approve.
Last reviewed: May 2026
Why the FCA does not regulate energy brokers
The Financial Conduct Authority's perimeter is set by the Financial Services and Markets Act 2000 and the Regulated Activities Order. Within that perimeter sit deposit-taking, insurance mediation, investment advice, mortgage broking, consumer credit, payment services, and a defined list of other activities. Non-domestic energy supply and brokerage are not on that list.
This is not an oversight. Energy supply is regulated by Ofgem under the Electricity Act 1989, the Gas Act 1986, and subsequent statutory instruments. The regulatory boundary is deliberate: financial promotions and credit are FCA business, energy supply is Ofgem business.
The practical consequence is that a non-domestic energy broker in the UK in 2026 does not require FCA authorisation, does not need to be on the Financial Services Register, and is not bound by the FCA's Senior Managers and Certification Regime. There is no Financial Ombudsman Service jurisdiction over non-domestic energy broker conduct.
Domestic energy switching services that handle credit, or pure price comparison sites that hold a different permission, may touch FCA-regulated activity for unrelated reasons. The energy brokerage itself does not.
What Ofgem does cover and where the gap sits
Ofgem regulates the supply licence. Standard Licence Condition 0 and the broader Standards of Conduct require suppliers to behave fairly toward microbusiness customers and to manage their TPI relationships with due care. The 2022 changes following the Non-Domestic Market Review tightened the requirement on suppliers to take responsibility for what brokers do in their name.
In practice, this means a supplier accepting a contract sale from a broker has a regulatory obligation to make sure the sale was conducted fairly. If a broker misrepresents the rate, hides the commission, or signs a microbusiness customer to a contract without informed consent, the supplier sits in regulatory line of fire even if the broker does not.
The gap is what Ofgem cannot do directly. It cannot fine a broker, suspend a broker, or strike a broker off a register that does not exist. It can only act through the supplier licence.
The Non-Domestic Market Review consultation document published by Ofgem in 2024, with subsequent statutory consultation through 2025 and into 2026, sets out the direction. Direct enforcement on brokers requires statutory powers that Ofgem does not yet hold. Government has indicated, through DESNZ statements, that legislative time will be needed to bring TPIs into a regulated perimeter.
How brokers are paid: the commission question
Most non-domestic energy brokers are paid by uplift on the unit rate. The supplier pays the broker a commission, and the broker recovers that commission from the customer through a higher unit rate over the contract term.
The commission is typically expressed in pence per kWh added to the wholesale-plus-supplier-margin unit rate. A common range in the SME market is 0.5 to 3 pence per kWh, depending on consumption volume and contract length. On a 24-month fixed at a site consuming 100,000 kWh per year, a 2 pence per kWh uplift represents 4,000 pounds of commission over the contract term.
Most customers do not see the uplift figure. They see a single unit rate quote and a contract. The broker is not, in the current regime, required to disclose the commission in pence per kWh on the contract documentation.
The proposed TPI rules include mandatory commission disclosure as one of the central items. If introduced as drafted, the broker would have to state the commission, either in pence per kWh or as a total monetary figure, on the contract paperwork before signature. This would be the single most significant practical change for the SME buyer.
Citizens Advice and the complaint pattern
Citizens Advice publishes commentary on the non-domestic energy market through its consumer work and policy submissions. Broker mis-selling has been a recurring theme. The most common complaint patterns reported in Citizens Advice and Ombudsman Services Energy work are: undisclosed commission, misrepresentation of rates as supplier-direct when they are broker-uplifted, contracts signed by the broker without explicit customer authorisation, and renewals processed against a Letter of Authority that the customer did not realise was still active. Each of those patterns has a structural cause inside the current regulatory regime. Undisclosed commission persists because no rule yet requires disclosure on contract paperwork. Rate misrepresentation persists because no published supplier rate card exists at most suppliers, so the customer has nothing to compare the broker quote against. Contracts signed without explicit authorisation are enabled by broadly drafted LOAs that authorise more than the customer realised. Renewals processed against stale LOAs are a function of LOAs without expiry dates, sitting active in supplier systems years after the original quote exercise concluded. The four patterns are not isolated incidents; they are predictable outputs of the current regime.
For microbusiness customers, the Energy Ombudsman can take complaints once the supplier's internal process is exhausted or has run for eight weeks. Because the broker is acting on the supplier's behalf in the Ombudsman's view, broker conduct gets pulled into supplier-route remedies even though the broker is not directly regulated.
For non-microbusiness SMEs, the route is harder. The Ombudsman does not have automatic jurisdiction. Contract disputes go through the supplier's commercial complaints process, and from there typically to litigation if unresolved.
How to verify a broker before signing
There is no statutory register of non-domestic energy brokers in May 2026. There are voluntary code-of-practice schemes (notably the Utilities Intermediaries Association code and the Code of Practice operated through some industry bodies) but membership is not universal and is not enforced by a regulator.
The verification steps that do work, in order.
Check Companies House. The broker's legal entity, registered address, directors, and filing history are public. A broker registered in the last six months is a different proposition to one trading for twelve years. Repeated entity dissolution and re-registration is a red flag visible from Companies House records.
Check the FCA register, not because the broker should be on it, but because some brokers misrepresent themselves as FCA-regulated. The register confirms or refutes that claim.
Check Ombudsman Services Energy reports for named patterns. The annual report and quarterly publications name supplier-side issues; while it does not name brokers directly, it does flag the contract-introduction stages where mis-selling concentrates.
Ask for the commission in writing before signing. The broker is not currently required to disclose, but is also not prohibited from disclosing. A broker refusing to put commission in writing on a contract proposal is making a clear signal.
Read the Letter of Authority carefully before signing it. This is the document that matters most.
The Letter of Authority and the multi-LOA trap
A Letter of Authority is the document a customer signs to allow a broker to act on their behalf with energy suppliers. The function is procedural: the broker needs the LOA to obtain quotes from suppliers, request consumption data, and run a tender on behalf of the customer.
The breakage point is what the LOA covers. A narrowly drafted LOA authorises the broker to obtain quotes only. A broadly drafted LOA can authorise the broker to terminate existing contracts, sign new contracts, accept renewal offers, and act for the customer in all dealings with named suppliers, sometimes for an extended duration.
The multi-LOA trap is when a customer, looking for quotes, signs LOAs with several brokers in quick succession. Each broker now holds authority to act with suppliers. Suppliers receiving conflicting instructions default to the most recent LOA, which may not be the broker the customer intended to use. Contracts can end up signed by a broker the customer no longer considers their representative.
The defence is two-step. Sign LOAs that are explicitly limited in scope and time (for example, "to obtain quotes only, valid for 30 days, not authorising contract signature"). Issue written revocation of any LOA that is not actively in use, copied to the named supplier list, before signing a new LOA with a different broker.
A side-by-side comparison with regulated financial intermediation makes the protection asymmetry visible.
| Feature | FCA-regulated mortgage broker (illustrative) | Non-domestic energy broker (May 2026) |
|---|---|---|
| Statutory authorisation | Required, FCA register | Not required, no register |
| Mandatory commission disclosure | Required | Not required (proposed under Ofgem TPI rules) |
| Approved ADR scheme | Financial Ombudsman | Energy Ombudsman for microbusiness via supplier; gap for larger SME |
| Code of practice | Statutory FCA Handbook | Voluntary industry codes only |
| Individual accountability | SMCR for senior managers | None |
The table illustrates the practical regulatory gap. It is not a like-for-like comparison: energy supply is not a credit product and the FCA framework would not transpose cleanly. But the protection asymmetry is the point.
Warning signs and brokers to avoid
Cold-call brokers offering "Ofgem-approved" rates. There is no Ofgem-approved rate. Suppliers set rates; Ofgem regulates supplier conduct.
Brokers claiming FCA regulation for energy broker activity. The FCA does not regulate this activity.
Brokers who refuse to put commission in writing on a proposal.
Brokers who present an LOA for signature before a quote, without specifying the LOA scope and duration.
Brokers operating through a recently dissolved and re-registered entity.
Brokers using high-pressure tactics around contract end dates, particularly when the customer is approaching out-of-contract rates and the broker positions themselves as the only way to avoid them. The supplier-direct route is always available; the broker is one option, not the only option.
A specific example from the UK market: through 2024 and into 2025, Citizens Advice and Ombudsman Services Energy commentary highlighted a pattern of broker activity in the West Midlands and Greater Manchester targeting small hospitality businesses approaching contract end, with multi-LOA conflicts and commission opacity as the recurring complaint themes. The pattern is industry-wide rather than regional, but the visible concentration in those areas illustrates the typical SME context where the protection gap bites hardest.
Where the 2026 reform actually lands
Ofgem's Non-Domestic Market Review published proposals through 2024 and 2025 covering commission disclosure, complaint handling via approved ADR, mandatory accreditation, and a code of practice. The route to enforcement is statutory: government legislation is required to give Ofgem direct enforcement powers over TPIs that it does not currently hold.
As of May 2026, the consultation work is substantially complete and legislative time is the remaining variable. Until the statutory instrument is in force, the regime described above remains the operating reality, and SME buyers continue to bear the verification burden.
Editorial disclaimer. KaelTripton is an independent UK publisher. This article is editorial, not personal financial or energy procurement advice. Rates, caps, grant levels and supplier offers move; verify any figure with the named primary source before acting on it. KaelTripton does not earn commission from suppliers or brokers mentioned.
Frequently asked questions
Is any non-domestic energy broker FCA-regulated for energy activity?
No. Non-domestic energy brokerage is not a regulated activity under the Financial Services and Markets Act 2000. A broker firm may be authorised for unrelated activities, but the energy brokerage itself is outside the FCA perimeter.
What does Ofgem currently do about broker mis-selling?
Ofgem acts through the supplier licence. Suppliers are responsible for sales conducted by brokers on their behalf under the Standards of Conduct, including the 2022 microbusiness changes. Direct broker enforcement requires statutory powers Ofgem does not yet hold.
Can the Energy Ombudsman handle a broker complaint?
For microbusiness, the Ombudsman has jurisdiction through the supplier, and broker conduct in the sales chain is in scope. For larger SMEs, automatic jurisdiction does not apply and contract remedies typically run through the supplier's commercial process.
How much commission does a typical energy broker take?
Commission is usually charged as an uplift on the unit rate. SME-market figures of 0.5 to 3 pence per kWh added to the supplier-direct rate are typical, varying with volume and contract length. On 100,000 kWh per year, a 2 pence uplift adds 4,000 pounds across two years.
What should a Letter of Authority actually authorise?
For most SMEs, the safest LOA authorises quote-gathering and consumption data access only, with a clear time limit (typically 30 to 60 days) and an explicit exclusion of contract signature authority. Broadly drafted LOAs are the source of most multi-broker conflicts.
Sources
- Ofgem - Non-Domestic Market Review TPI rule changes, 2024-2026 consultation
- Ofgem - Energy advice for businesses, microbusiness Standards of Conduct
- Citizens Advice - Energy supply and broker complaint reporting
- Ombudsman Services Energy - sector reports and microbusiness jurisdiction
- FCA - Financial Services Register, used to verify any FCA claims
- DESNZ - Department for Energy Security and Net Zero, TPI legislation policy