Energy brokers and third-party intermediaries arrange billions of pounds of business energy contracts each year but sit outside direct regulation by Ofgem or the FCA. December 2022 licence condition amendments placed transparency obligations on suppliers when working with brokers, but the brokers themselves remain unregulated. The policy debate over direct TPI regulation is active, and voluntary codes exist, but meaningful protection for business customers relies primarily on regulatory reform that has not yet arrived.
Last reviewed: 12 May 2026
The Regulatory Gap: Why Energy Brokers Operate Outside Both Ofgem and FCA Oversight
Third-party intermediaries (TPIs), commonly known as energy brokers or consultants, arrange non-domestic energy contracts between business customers and licensed energy suppliers. The volume of commercial contracts arranged through TPIs is substantial: Ofgem's non-domestic market review found that a significant majority of microbusiness customers use a broker or intermediary at least once during their energy procurement history.
Despite this market position, TPIs occupy an unusual regulatory space. Ofgem licenses energy suppliers and holds them to Standard Licence Conditions, but Ofgem does not directly license or regulate brokers. The FCA regulates financial services intermediaries, including insurance brokers who arrange comparable products, but energy contracts are not classified as financial instruments and fall outside the FCA's statutory perimeter under the Financial Services and Markets Act 2000.
The consequence is that a business customer dealing with an energy broker has no direct regulatory recourse against that broker in the way it would against a regulated financial adviser or insurance intermediary. If a broker provides misleading information, conceals commission, or arranges an unsuitable contract, the customer's formal complaint route runs through the licensed supplier (who is responsible for the conduct of TPIs acting on its behalf), not directly against the broker. The broker itself faces no direct regulatory sanction from either Ofgem or the FCA.
Ofgem's non-domestic market review documents, published between 2021 and 2023, acknowledged this gap explicitly and identified TPI conduct as one of the primary drivers of poor outcomes in the business energy market, particularly for microbusiness customers.
The December 2022 Licence Condition Amendments: What Changed for Suppliers
In December 2022, Ofgem implemented a package of amendments to the Standard Licence Conditions for electricity and gas suppliers, specifically addressing the relationship between suppliers and the TPIs they work with. These amendments did not regulate TPIs directly but instead placed obligations on suppliers to ensure that TPIs acting on their behalf behaved appropriately.
The key changes relevant to broker conduct included:
Commission disclosure requirements: Suppliers were required to ensure that TPIs acting on their behalf disclose to microbusiness customers the basis of their remuneration, including the existence and nature of any commission paid by the supplier. This addressed the widespread practice of commission being embedded in the unit rate without the customer's knowledge.
Renewal notification windows: Suppliers were required to notify microbusiness customers of approaching contract renewal dates within a defined window, giving customers adequate time to shop the market rather than being rolled automatically into a new contract. TPIs managing renewals on behalf of suppliers were required to operate within these windows.
Complaints handling obligations: Suppliers were required to have accessible complaints processes for microbusiness customers, including those who experienced problems arising from TPI-arranged contracts, and to be accountable for TPI conduct in the complaints and Ombudsman framework.
These changes placed accountability on the supplier as the regulated party, rather than regulating the broker directly. Critics of this approach, including Citizens Advice and consumer groups, noted that it left unaddressed the conduct of TPIs that do not have a formal agency relationship with a specific supplier, including independent brokers who may have relationships with multiple suppliers.
The Active Policy Debate: Should TPIs Be Brought Into Direct Regulation?
The question of whether energy brokers should be directly regulated has been a recurring theme in Ofgem's non-domestic market review and in parliamentary scrutiny of the energy market. The House of Commons Business and Trade Committee has taken evidence on TPI conduct and the adequacy of current protections for small business energy customers.
Two principal positions have emerged in the policy debate:
The case for direct TPI regulation: Proponents, including Citizens Advice, argue that placing obligations solely on suppliers is insufficient because it does not address all TPI conduct and relies on suppliers to police their broker networks effectively. Direct regulation, whether by Ofgem under an expanded licensing regime or by the FCA under an extended regulatory perimeter, would give regulators enforcement tools against brokers directly and would give customers a direct complaint route.
The case for supply-chain accountability: Suppliers and some industry bodies argue that holding suppliers accountable for TPI conduct is the most efficient mechanism, because suppliers already interact with brokers commercially and have leverage to enforce conduct standards as a condition of the commercial relationship. Direct TPI regulation would add compliance costs for brokers and potentially reduce competition by raising barriers to entry.
As of May 2026, Ofgem has not implemented direct TPI licensing. DESNZ has consulted on options including a mandatory accreditation scheme for business energy brokers, but no legislation has been enacted. The Energy Act 2023 did not introduce direct TPI regulation, though it expanded Ofgem's general powers in ways that could support future action.
Comparison to FCA Regulation of Insurance Brokers
The FCA's regulation of insurance intermediaries provides the closest regulatory model to what TPI regulation might look like if implemented. Under the Financial Services and Markets Act 2000 and the Insurance Distribution Directive as implemented in UK law, insurance brokers must be authorised by the FCA, meet conduct of business standards, disclose remuneration to clients, and submit to FCA supervision and enforcement.
The parallels with energy broking are clear: both sectors involve intermediaries arranging contracts with significant financial consequences for business clients, both involve commission structures that create potential conflicts of interest, and both serve markets where customers often lack the expertise to evaluate the advice they receive.
The FCA's Senior Managers and Certification Regime (SMCR) also applies to regulated financial intermediaries, placing personal accountability on senior individuals for the firm's conduct. No equivalent personal accountability regime applies to energy broker principals.
Applying FCA-equivalent oversight to energy brokers would require either primary legislation extending the FCA's perimeter or the creation of a new licensing regime under amended energy legislation. Either route is a multi-year process. In the interim, the voluntary codes offer a partial substitute.
Voluntary Codes: Energy UK and the Utilities Intermediaries Association
Two voluntary frameworks currently set conduct standards for energy brokers who choose to participate:
Energy UK Code of Practice for Third Party Intermediaries: Energy UK, the trade body for energy suppliers, published a code of practice for TPIs that sets expectations around commission transparency, contract terms presentation, complaint handling, and renewal practice. Adherence is voluntary: brokers sign up if they choose to, and there is no mandatory requirement to participate as a condition of operating in the market.
Utilities Intermediaries Association (UIA) Code: The UIA is the industry body for energy and utilities brokers. Its code of conduct covers similar ground: transparency in remuneration, fair presentation of contracts, prohibition on pressure selling, and a complaints process for customers dealing with member brokers. UIA membership is again voluntary.
The limitations of voluntary codes are well-documented in Ofgem's published analysis. Brokers with poor conduct practices have little incentive to join voluntary schemes that would hold them to higher standards. The firms that cause the most harm to business customers are typically not members of either code. Voluntary codes therefore protect customers dealing with well-run brokers who would likely behave appropriately regardless, while leaving customers dealing with non-compliant brokers without meaningful recourse against the broker directly.
What Businesses Can Do Until Direct Regulation Arrives
In the absence of direct TPI regulation, businesses arranging energy contracts through a broker can take specific steps to protect their interests:
Require written commission disclosure before signing: Ask the broker in writing to confirm the existence, basis, and amount of any commission or remuneration it will receive from the supplier in connection with the contract. Since December 2022, suppliers are required to ensure this disclosure is made for microbusiness customers. If the broker refuses to disclose, treat this as a significant warning sign and seek an alternative route to market.
Compare the offered rate against published benchmarks: DESNZ quarterly non-domestic energy price statistics provide average unit rates by consumption band. A rate significantly above the published average for the relevant band warrants a question about the commission embedded in it.
Check whether the broker is a UIA member or Energy UK code signatory: Membership does not guarantee good practice but provides a baseline expectation of conduct standards and a route for complaints against the broker alongside the supplier complaint route.
Raise complaints against the supplier where broker conduct causes harm: Because the supplier is the regulated party, the formal complaint route for TPI-related issues runs through the supplier's complaints process and, for microbusinesses, the Energy Ombudsman. Document the broker's representations in writing before signing to preserve evidence for any future complaint.
Frequently Asked Questions
Editorial disclaimer: The following answers are provided for general guidance only. The regulatory landscape for energy brokers is subject to ongoing policy development. Businesses with specific concerns about broker conduct should seek independent advice from Citizens Advice or an energy legal specialist.
Can I complain to Ofgem directly about an energy broker?
Ofgem does not currently accept direct complaints from business customers about individual energy brokers, because brokers are not licensed by Ofgem. Ofgem can and does take enforcement action against licensed suppliers for failures in their management of TPI relationships. Reporting systemic TPI conduct concerns to Ofgem via its published reporting channels contributes to the evidence base for regulatory action, but does not resolve individual disputes. For individual dispute resolution, the route is through the licensed supplier and, for microbusinesses, the Energy Ombudsman.
Is an energy broker legally required to tell me how much commission it receives?
Since December 2022, licensed suppliers are required by Ofgem's Standard Licence Conditions to ensure that TPIs acting on their behalf disclose the basis of their remuneration to microbusiness customers. The obligation sits on the supplier, not directly on the broker. In practice, this means the broker should provide commission disclosure as part of the contract arrangement process for qualifying microbusiness customers. For larger businesses above the microbusiness threshold, there is no equivalent regulatory requirement, though the broker may be contractually or voluntarily committed to disclosure under its conduct code obligations.
What is the difference between an energy broker and an energy consultant?
The terms are used interchangeably in the market. Both describe an intermediary that arranges energy contracts on behalf of a business customer. Some firms use the term consultant to suggest an advisory rather than transactional relationship, implying that the service extends beyond contract arrangement to include consumption analysis and efficiency advice. In regulatory terms, both are TPIs and neither is directly regulated regardless of the label applied.
Does the FCA regulate any aspect of business energy contracts?
The FCA does not regulate standard business energy supply contracts or the brokers who arrange them. Energy supply contracts are not classified as financial instruments or investments under the Financial Services and Markets Act 2000. The FCA does regulate certain energy-related financial products, such as energy price hedging derivatives and commodity futures, but these are distinct from standard supply contracts and are not typically involved in a routine business energy procurement exercise.
What should I do if a broker rolled me into a contract without proper notice?
Raise a formal complaint with the licensed supplier, not just the broker, citing the December 2022 SLC amendments on renewal notification windows for microbusiness customers. Document the timeline of communications from the broker and the supplier. If the complaint reaches deadlock without resolution, microbusiness customers can refer to the Energy Ombudsman. The Ombudsman can direct the supplier to release the business from a rolled-over contract or award a financial remedy where the renewal process did not comply with licence conditions.
How we verified this
This article draws on Ofgem's published non-domestic market review documentation, the December 2022 licence condition amendments published on Ofgem's website, Energy UK's published code of practice for TPIs, the Utilities Intermediaries Association's conduct code, and Citizens Advice published responses to Ofgem consultations on non-domestic market reform. The FCA regulatory framework for insurance intermediaries is verified against FCA published rules at fca.org.uk. Legislative references are verified against legislation.gov.uk.
Sources
- Ofgem non-domestic market review and licence condition amendments
- Ofgem microbusiness consumer protections and TPI disclosure requirements
- FCA Insurance Distribution Directive implementation and broker regulation
- Citizens Advice: business energy supply and broker guidance
For a practical guide to evaluating broker commission structures before signing a contract, see business energy broker commission UK. For the rights available when a broker-arranged contract turns out to be mis-sold, see mis-sold business energy claims UK.
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