New regulation for energy brokers

The consultation revealed widespread issues in the energy brokerage market. While many brokers deliver a valuable service, the government found persistent risks of mis-selling, hidden commissions, and poor transparency, particularly affecting small business and charity customers. This follows years of complaints from small businesses (SMEs) who discovered that their brokers had added large undisclosed commissions or tied them into uncompetitive contracts. The new reforms aim to change that, ensuring all brokers operate fairly, transparently and under proper oversight. As energy costs remain one of the biggest outgoings for small firms, knowing your broker is acting transparently is a really good news.

Ofgem to become the regulator for energy brokers

Under the new proposals, Ofgem will take on formal responsibility for regulating TPIs for the first time. This means any company helping businesses arrange energy contracts will need to be authorised and registered with Ofgem before they can operate. Once appointed as regulator, Ofgem will be able to:

• Set rules and principles for broker conduct

• Require registration and “fit and proper” checks for TPI decision-makers

• Monitor and investigate firms

• Order redress or fines for misconduct

• Exclude bad actors from the market

The government expects Ofgem to begin preparing in 2026, with new rules and registration opening after legislation passes.

What will change for small businesses

For small business customers, these changes should make choosing an energy broker safer and more transparent. Here’s what you can expect once regulation takes effect:

• Clearer fees and commissions: Brokers will need to be open about how they’re paid and which suppliers they work with.

• Fairer comparisons: Brokers and comparison sites will have to act in your best interest, not just chase higher commissions.

• Easier complaints and redress: Ofgem will require brokers to join an Alternative Dispute Resolution (ADR) scheme, giving you a clear route to escalate issues.

• Better customer service: New conduct principles will raise standards and penalise high-pressure or misleading sales tactics.

These protections are designed to level the playing field, ensuring trustworthy brokers can compete fairly and SMEs can get value for money.

When will this happen?

Legislation will be introduced “when parliamentary time allows”, with a phased rollout planned:

1. 2026: Ofgem conducts a market survey and starts designing registration and rules.

2. Post-legislation: Ofgem becomes regulator and opens a “sunrise period” (expected 12–18 months) for brokers to register.

3. After the sunrise period: It will become illegal to operate as an energy broker without Ofgem authorisation.

So while the changes won’t happen overnight, the direction of travel is clear, energy brokerage is moving from a largely unregulated market to a regulated profession.

What you can do now

Until the new regime is in place, small businesses can still take practical steps to protect themselves when renewing or negotiating energy deals:

• Ask your broker to disclose their commission in writing.

• Request quotes from multiple suppliers, or check comparison platforms directly.

• Use ADR schemes (like the Energy Ombudsman) if you believe you’ve been mis-sold a contract.

• Check reviews and membership of industry bodies such as the Utilities Intermediaries Association (UIA).

At Capitalise, we’ll continue monitoring these regulatory changes closely, as transparency and trust are key to helping small businesses make better financial decisions.