You're a disgrace!
August 1st 2008 No not you; the energy consumer, or you the energy supplier but perhaps your energy advisor is! Mark Dickinson examines what you require from your advisors
If you are an energy advisor or working for one, you may wish to take a moment to stop what you are doing and pop to the bathroom, take a good look in the mirror and examine the ethics and honour of your organisation; personal pride and self respect are worth far more than financial gain.
If you are an energy supplier, you may want to consider that whilst some advisors can help you grow your portfolio, are their practices really what is best for the consumer and don't we all have a duty to try and do what is best for the consumer.
Please don't misunderstand me. I expect my organisations to be judged by the same standards and the purpose of this article is to stimulate a debate that has been necessary and overdue for a long time now. Moreover, if you do not consider the practices outlined below distasteful, there is also no need to change your behaviour.
However, some of the practices that are alleged to be occurring in the energy advisory space leave me nauseous as some appear to be trying to use legal acrobatics to restrict market competition between suppliers and advisors, rather than simply relying on retaining business by giving you a good service.
It is not for us to cast stones or aspersions on what may or may not be happening in the energy markets; however it is for you to reflect on the behaviour of your energy advisor and decide whether such behaviour could be considered good practice or bad practice.
Some examples of the kind of questions you may wish to ask yourself in order to determine whether the behaviour of your energy advisor is acceptable to you are:
Do I know how much commission my energy supplier paid my energy advisor?
Did my energy advisor warrant that this was all of the money they received from the energy supplier and that no costs were inflated or charges adjusted to give a pseudo commission?
Does my energy advisor use their power with the supplier to stop them speaking to me directly?
When was the last time I had a conversation with my energy supplier without my advisor there?
Does my contract with my energy advisor have a notice period where I am restricted from talking to other energy advisors or suppliers?
When operating a flexible contract does my energy advisor ensure I get the true market price or do they take commission either hidden or not; the market price is yours by right, make sure you get it?
Does my contract with my energy advisor restrict me from sharing data about my supply with other parties; its your data not theirs, make sure you are not fettered in your discretion to use it?
Once you have reflected on your current services and done the checks above, its time to change the status quo. Even if you like your current advisor and don't wish to change them, you do need to improve the level of transparency; its simply good corporate governance.
In particular it may make sense to serve any termination notices now, so that your ability to change advisor or supplier is not unfairly restricted some time in the future.
When you enter into the next contract with your advisor ask for the following provisions to be inserted:
My Energy Advisor shall warrant that all tender analysis shall transparently show how much money is being paid by the Supplier to the Advisor My Energy Advisor shall warrant that this information shall be provided for all quotations received
My Energy Advisor shall warrant that no other money is being received from the Supplier
My Energy Advisor shall warrant that in the event that money is received from a Supplier for any other purpose this payment which could create a conflict of interest is revealed to me
My Energy Advisor shall warrant not to restrict me from speaking to any other Energy Advisors for the life of my contract
My Energy Advisor shall warrant not to restrict my supplier or any other supplier from speaking to me for the life of my contract
My Energy Advisor when entering into price locking and unlocking transactions shall warrant to make the market price, which is rightfully mine, available to me, without deduction or fee
My Energy Advisor shall warrant that they shall not take a fee from me for entering into price locking or unlocking transactions creating a perverse incentive to increase the number of transactions that my company is party to
My Energy Advisor shall provide transparent access to all conversations and correspondence with all third parties relating to my energy supply
My Energy Advisor shall provide transparent access to any and all data relating to my energy supply even when the contract is terminating
My organisation is one of the leading suppliers of energy risk management services to energy consumers and I hereby confirm that we will sign up to the principles above and if there are others which should be included lets all consider those as well. We would call on all other energy advisors to sign up to these principles as well; more importantly you should demand that your energy advisor does.
The kind of behaviour alleged to be happening within the market for energy advisors, if true, is a disgrace.
Its time to clean up this town, it seems like there are a lot of cowboys out there and some of them are bigger organisations than you think.
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