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“Contrary to suggestions otherwise, there is a place for third-party intermediaries in the retail water market.”
In making the statement that brokers have no place in the water market (News, 23 January 2017, http://bit.ly/2kizwLV), Waterscan’s Neil Pendle paints a simplistic picture of a market that is influenced solely by the retailer and motivated by margin. He has completely ignored that fact that consumer behaviour will be a critical component in how this market will evolve. The customer will decide whether third-party intermediaries (TPIs) have a role in the marketplace.
The point is made that the margins are small, but this could be seen as a cautious approach adopted by Ofwat as a means of controlling the growth of an emerging market. Because the savings are limited and successful businesses are busy businesses, knowledgeable and trusted TPIs will be needed. It is a logical step for the customer who uses a TPI for their gas and electricity purchasing to require it to deal with their water purchasing as well. So, whether TPIs wish to enter the market or not, their customers will dictate that they do so by requiring a comprehensive offering.
Reducing the cost of water is not the only way of saving money. Water efficiency, bill scrutiny and time-saving measures such as single billing for multi-site premises will be a feature of the new market, and all have a role to play. Members of the Utilities Intermediaries Association (UIA) have been advising on these methods for years in the non-competitive water market.
The UIA would agree that certain types of brokers should not be welcome in any industry, namely those that seek to confusticate the customer to make a quick buck. All members of the UIA work to a proven code of practice tied to an independent redress scheme, so a customer can use a UIA member’s services with complete confidence.
Ofwat, like the gas and electricity regulator Ofgem, has no governance over TPIs and will be introducing only a voluntary code of practice. Many TPIs will claim they work to this, but if anything goes wrong it has no teeth.
If Ofwat wishes to keep the market clean it should insist that retailers make their TPIs record all calls associated with a verbal introduction in their entirety, and make recordings available should there be a complaint.
How will you decide which TPIs to use for your utility purchases? A UIA member who has signed a binding agreement to work in your best interests or someone who says they will honour a voluntary code of practice that offers you no additional redress should you be treated unfairly?
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