What is the difference between a broker and an energy consultant?

The terms get used loosely. Ofgem groups everyone who gives advice to help you buy or manage energy under one label: a third-party intermediary, or TPI. That covers switching sites, brokers and other procurement support, so a firm can call itself either and mean much the same.

Where the difference usually lies

	Typical broker	Typical consultant
Main job	Finds and arranges a supply contract	Advises on buying strategy, usage and costs
How paid	Often commission from the supplier, built into your rates	Often a fee paid by you, sometimes a mix
Where the cost appears	In your supplier's Principal Terms	May not appear there if you pay directly
Extras	Renewals, contract admin	Audits, budgeting, flexible purchasing, efficiency advice

These are tendencies, not rules. Some brokers sell consultancy; some consultants also take commission.

Why the payment method matters

Ofgem says a TPI can be paid directly by you or indirectly through the supplier. If paid indirectly, the cost must be shown in the Principal Terms. If you pay the firm directly, it does not have to appear in the supplier's terms, so you need the firm's own agreement in writing. See brokers and commission.

Example

A garage owner is offered a "free" broker deal with an uplift of £900 over three years inside the rates, or a consultant at a flat £600 fee who passes on supplier rates without a markup. The consultant is £300 cheaper on paper, but check whether the rates are really comparable and whether the consultant also takes commission from the supplier. (Figures are made up for illustration.)

Protections apply either way

If a firm is paid by a supplier, suppliers may only use those in a qualifying dispute scheme (from 1 December 2022 for microbusiness contracts and from 19 December 2024 for small business contracts). Ask which scheme the firm belongs to; see what a QDSS is.

Which suits you?

• One site, simple needs: a broker or going direct is likely enough.
• Several sites, half-hourly meters, on-site generation: a consultant's broader advice may justify a fee.

Ask any adviser: "How will you be paid, in pounds, for this contract?" and "Do you take commission from suppliers on top of my fee?"

Questions that cut through the label

• Do you accept payment from suppliers for any contract you arrange for me?
• Will you give me a written statement of every fee, direct or indirect?
• Do you advise on reducing usage as well as buying energy?
• What happens if I want to leave you before my contract ends?

Check the paperwork either way

Whichever you pick, get a written engagement letter that states the services, the fee or commission in pounds, how long it lasts and how to end it. That single document answers most future disagreements.

Next steps

Use our guide on choosing a business energy broker and our checks in how to check a broker is trustworthy.