‘If you use an energy broker, do you know what they’re earning?’
It’s a question we often ask people we meet at shows and networking events, and one that is rarely answered with a ‘yes’.
There are many ways a broker can charge you for their services:
- They may invoice you for a one off administration fee.
- Most have their fee added to the rates that are quoted to you (For example, every 1Kwh energy you use, the broker is paid by the supplier 0.2 pence).
- Others take a portion of the “savings”. I put savings in quotation marks as the term can mean different things in this industry. Some may say that they’re making you a saving against your renewal quote from your current supplier, and take a portion of it. Others will take a portion of any saving you make compared to what you are currently paying.
The most common way of receiving commission (and the way we receive ours) is to have our fee included in the rates quoted to you from suppliers. It means you don’t have to worry about paying any extra invoices and there’s less paperwork to deal with.
This method means brokers have a lot of control over how much they charge for their services, without the client necessarily knowing how much they’re paying. That’s why we always recommend asking your broker what they’re earning, to make sure you’re getting value out of your relationship with them.