Few people noticed when the country s certified financial planners voted to tighten their ethical standards last summer. After all, act in the best interests of your client hardly seems like a radical departure from what most planners would say they do already.

But State Farm apparently disagrees. In response, the Bloomington, Ill.-based company, which sells annuities, mutual funds and financial advice along with a full slate of insurance products, has instructed some 270 agents who are also certified financial planners to abandon their CFP designation. Other insurance companies may do the same. A Prudential spokesperson says they re reviewing their policy as well.

The problem, says State Farm, involves what s called a fiduciary standard the pledge to do what s best for the client, even if it s not what s best for the agent. Attorneys are fiduciaries, so are trustees, and this summer, the Certified Financial Planner Board of Standards, Inc., which awards and monitors the CFP designation, added it to its code of ethics. It s a tougher standard, says Barbara Roper, director of investor protection for the Consumer Federation of America. It s what distinguishes advice from sales. There are legal implications, too: If anyone who is a fiduciary doesn t uphold his responsibility, the consumer can sue.

There s an understanding that State Farm agents are acting as fiduciaries when they re doing financial planning, the company says. But not when they re selling insurance: Under existing law, property/casualty insurance agents don t have a fiduciary relationship with their customers, spokesman Dick Luedke said in an email. Then the agent s only responsibility is to tell their customers what kind of coverage is available, and how much it costs. As a compromise, the company asked the CFP Board to exempt insurance sales from the definition of financial planning.

It doesn t work that way, said the CFP Board. Being a fiduciary is about building trust, said Kevin Keller, CEO of the CFP Board. You can t put that hat on when you want to sell some products, and take it off when you re selling others. At the very least, it has the potential to be confusing to the customer: Reviewing insurance coverage is often part of a comprehensive financial plan, but when your State Farm agent is helping you decide how much life insurance you need, is he acting in your best interest, or his own?

For years, many in the investment industry insisted that planners and financial advisors didn t need a fiduciary standard, because the existing laws already offered investors enough protection. But the very fact that State Farm reacted so strongly proves that the fiduciary standard is more than just a nice idea, says Keller. Roper agrees: This is the classic dodge, she says. Sales people want to call themselves 'advisors' and 'consultants' and say they give advice, but they don t want to live by the standards that go with being advisors.