The Third Outcome: Ofgem, Brokers and the Fair Value Test

Most of the market will file Ofgem's new good practice guidance under transparency housekeeping. That is a misreading. The document's first two outcomes restate what suppliers and brokers should already be doing. Its third borrows a phrase, fair value, almost verbatim from the FCA's Consumer Duty, and that phrase has form. It is the same test the FCA used to halt the sale of GAP insurance until commissions fell. For an energy broker commission pool comfortably north of half a billion pounds, Outcome 3 is where the economics change.