For as long as the business energy broker industry has existed in the UK, it’s operated in a strange kind of blind spot. Energy suppliers hold an Ofgem licence and answer to a regulator. Brokers, sitting right in between the supplier and the customer, mostly haven’t. That’s about to change, and it’s worth understanding what’s actually shifting, because it affects how much trust you should put in a broker’s word right now versus in a year’s time.
Why weren’t business energy brokers regulated before?
Because, technically, brokers don’t supply energy — they just introduce a business to a supplier and get paid for it. That distinction meant Ofgem’s licensing powers, which apply to suppliers, never quite reached brokers directly. For years, the industry ran on a voluntary code of practice instead, which sounds reasonable until you look at how few brokers actually signed up to it. Out of roughly 2,700 brokers operating in the UK, only about 52 ever joined the voluntary scheme. That’s around 2%.
A voluntary code that 98% of the industry ignores isn’t really a code at all. It’s a badge a handful of brokers could point to, while the rest carried on however they liked.
What went wrong under the old system?
Quite a lot, if you look at the cases Ofgem has cited while building the case for regulation. One example that keeps coming up in the regulator’s own material: a microbusiness ended up with roughly £24,000 of its total contract cost being broker commission — around half the entire contract value — and the business was never told this upfront. That’s not a rounding error or a minor disclosure gap. That’s a business signing a contract without any real idea of what it was actually paying for the broker’s involvement.
Multiply that by thousands of small businesses without a procurement team to catch it, and you start to see why Ofgem eventually ran out of patience with self-regulation.
What’s actually changing?
The government confirmed in October 2025 that it’s giving Ofgem statutory powers to regulate brokers and other third-party intermediaries directly — something Ofgem itself had been asking for, having previously lacked the legal authority to enforce its own code. Since then, the rollout has moved in stages rather than all at once:
Commission disclosure has already tightened. Brokers now need to be upfront about how they’re paid, and for microbusiness customers specifically, that disclosure has to happen in writing before a contract gets signed — not buried in a follow-up email after the fact.
Dispute resolution access has been widening too. Alternative Dispute Resolution, or ADR, used to be something only microbusinesses could lean on if a broker treated them badly. That access is expanding to cover a wider band of small businesses, giving more companies somewhere to actually escalate a complaint rather than just accepting it.
Supplier-side pressure is doing some of the enforcement work in the meantime. Increasingly, suppliers are only willing to work with brokers who are signed up to a recognised ADR scheme — which, in effect, is starting to push brokers toward registration even before full statutory registration formally opens.
Full registration and conduct standards are the end goal, expected to phase in through 2026 and beyond, with Ofgem gaining the power to fine brokers or ban them from the market entirely for serious breaches once the framework is fully live.
What does this actually mean if you’re hiring a broker right now?
A few practical things follow directly from all this.
First, ask for commission disclosure in writing, and don’t accept vagueness as an answer. This is no longer just good practice — it’s becoming a genuine regulatory expectation, and a broker that dodges the question is telling you something.
Second, check whether the broker belongs to an ADR scheme, such as the Energy Ombudsman. This matters more than it sounds. If something goes wrong with your contract — a mis-sold term, an undisclosed fee, a switch that wasn’t handled properly — ADR membership is your actual route to resolving it without going to court. A broker with no ADR affiliation is one you’d have no real recourse against if things went badly.
Third, understand where your business sits in Ofgem’s size categories, because the protections attached to each tier are genuinely different. Microbusinesses (broadly, under 100,000 kWh of electricity or 293,000 kWh of gas a year, or fewer than 10 employees) get the strongest protections. Above that threshold, protections thin out considerably, and a lot of the redress routes microbusinesses can rely on simply aren’t available in the same way to larger commercial customers — at least not yet, ahead of the fuller regulatory rollout.
Does this mean all brokers were acting badly before?
No, and it’s worth being fair about that. Plenty of brokers have operated honestly for years without ever being forced to by regulation — disclosing commission because it’s the right thing to do, not because Ofgem made them. Regulation isn’t really being built for the brokers already doing this properly. It’s being built because the market had no reliable way to tell those brokers apart from the ones exploiting the same blind spot for a much bigger cut.
That’s actually the practical upside for anyone hiring a broker in 2026: once registration and conduct standards are fully in force, “is this broker legitimate” stops being a question you have to investigate yourself, and starts being something a public register can answer for you.
Frequently Asked Questions
Is it illegal for a broker to hide their commission right now? Not illegal exactly, but increasingly restricted. Current rules already require brokers dealing with microbusinesses to disclose commission in writing before a contract is signed. Full mandatory disclosure across all business sizes is part of where the regulation is heading, but hasn’t fully landed yet for every customer category.
How do I check if a broker is a legitimate, ADR-registered business? Ask directly which alternative dispute resolution scheme they belong to — the Energy Ombudsman is the most common — and verify it independently rather than just taking their word for it. A broker that can’t name one, or gets evasive about it, is a real warning sign under the direction the market is heading.
Will broker regulation make business energy more expensive? Not for the business buying the energy. If anything, mandatory commission disclosure tends to put downward pressure on inflated fees, since a broker padding their cut has to be more careful once that number has to be shown in writing. Businesses that were already dealing with a transparent, fairly-priced broker shouldn’t notice much difference at all.
What size business gets the most protection under current rules? Microbusinesses currently get the strongest protections — clear contract disclosure, a right to escalate disputes, and written commission disclosure requirements that don’t yet apply as firmly further up the size bands. If you’re unsure whether your business counts as a microbusiness, it’s worth checking Ofgem’s actual thresholds rather than assuming based on headcount alone.
Should I wait until regulation is fully in force before using a broker? Not necessarily. The protections that matter most — written commission disclosure and ADR membership — are already partly in place. The sensible approach is asking for both directly before signing anything, rather than waiting for a fuller framework that’s still being phased in.
The bottom line
Business energy brokers are moving, gradually but genuinely, from an unregulated grey area to something closer to a properly overseen profession. That’s a good thing for anyone who’s ever quietly wondered how much of their fixed-rate contract was actually going to a broker’s commission rather than the energy itself. Until the full framework lands, the two questions worth asking any broker before you sign anything are simple: how are you paid, and can you prove it in writing — and what happens if something goes wrong. A broker with straight answers to both is one worth trusting. One without either answer is one worth walking away from.
