In the final part of our good broker blog series, we look at questions you should be asking your broker to determine if they are open and honest.
“How much of the market have you searched to get me the best deal?”
A lot of brokers are not independent, instead they have commercial relationships with suppliers who reward them for hitting sales targets. This often leads to brokers pushing energy suppliers on you that are unsuitable or presenting something as a ‘best deal’ based on their own commercial aspirations and commission payments.
Ensure that you ask the broker the number of suppliers they received pricing from and request that they present you with those prices so you can make an informed decision. If the broker is not able to present more than three prices they are not providing a valuable broker service, after all you could have called that many suppliers yourself and received prices quickly and easily.
“How long is the contract term?”
Brokers earn more money from longer term contracts than shorter term contracts, but these are not always best for your business. To make an informed decision ask to see prices relating to different contract lengths. For example, if the broker is only offering a three to five year contract you should ask that they also present prices for one to two year contacts to be able to make an informed decision.
The difference between long and short term contacts:
- Long term contracts offer your business longer cost certainty but at a higher price
- Short term contracts offer you the ability to switch more often and take advantage of positive changes to the market price, but at a higher risk as prices may have risen by the time the contract ends.
A good broker is one that will offer the answers to these two questions without concern or hesitation, who can answer them clearly and explain their rationale for the contract offers presented. An excellent broker is one who offers the answers without being asked.
Other hallmarks of a good broker:
Good brokers will operate a voluntary ‘Code of Practice’ or ‘Customer Charter’ which publicly states their commitment to fair and appropriate selling. The best brokers will have a clearly defined sales compliance function. This team will be responsible for ensuring sales are executed in line with a Code of Practice, supplier expectations and in a fair and appropriate manner. (Total Gas and Power award some brokers their ‘Gold Award’ for good practice, one to look out for).
To ensure you get the best value for money, good brokers will offer a suite of consultancy services to support their offering, services such as:
- Legislative compliance
- Monitoring and control technology
- IoT energy management systems
- Energy efficiency projects