T. Rowe Price Associates Inc., the largest and most-recognized money manager in the region, is scurrying to keep on top of the changing financial services world.

The T. Rowe Price headquarters overlooking the Inner Harbor did not even quiver this year when investors withdrew more than $800 million--a quarter of their cash--from the money fund that only a year ago was one of the company's fastest-growing investment vehicles.

Most money market fund managers could do nothing but watch the cash drain away when other investments began to offer better interest rates. But with its family of no-load mutual funds, T. Rowe Price was able to hang on to more than half the money lost from its money fund by encouraging investors to transfer their holdings to another of the company's investment pools.

As the rate of change in the money business accelerates and as rapid swings in financial fashion become more frequent, managers of the $16 billion firm--ranked 8th among U.S. mutual fund companies by assets of funds--are devoting increasing attention to their own strategies in an increasingly competitive market.

Interviews with top officials of the 46-year-old company indicate considerable concern about the future direction of this privately held investment house, mirroring the tumult shaking the financial world from Wall Street to Main Street.

"Since the financial services environment is changing so dramatically, we can't sit still and say we want to look like we do today in 10 years," said John A. Laporte, director of the firm's research division. "If so, we'll be dead."

Like everyone else in their business, no one here is certain what the future holds and therefore no single survival strategy emerges in talks with Price executives, who acknowledge that they have been approached as a buyout target on numerous occasions.

Some of the firm's executives maintain that they can, in essence, stand pat, continuing to develop specialized "boutique" type services for a well-defined, loyal constituency.

"In terms of the upscale investor, we don't worry about Sears, Roebuck," said James S. Riepe, a vice president who directs mutual fund operations and marketing. "I don't think people will take their financial relationships to just one or two companies."

T. Rowe Price may not want to become a financial supermarket, but the company certainly is willing to take advantage of new opportunities presented by deregulation.

Last month, T. Rowe Price asked the Maryland Banking Commissioner for authority to form a trust company. Company officials say the move is designed to better serve trust and custodial accounts and to provide services for tax-sheltered and corporate accounts, which now must be run through an intermediary.

Company officials carefully deny that they are going into the banking business or trying to provide traditional banking depository services. They are guarded in discussing the trust company proposal before it is approved by the state banking commissioner, who has until December to act.

Other potential new services in which T. Rowe Price executives say they are likely to become involved include linking automatic teller machines with Price accounts; providing accounts with debit cards that could be used like MasterCard or Visa to buy goods and services, and offering stock-brokerage services. "We would only do it as a service for our shareholders, not as a new business," Riepe said of brokerage services. "But there's no way we can stand pat."

One reason T. Rowe Price is not diversifying further, executives say, is that their own surveys indicate their generally affluent investor base has little interest in one-stop financial shopping.

A recent poll of the company's customers concluded that 85 percent of the 1,700 Price shareholders questioned were either not interested or only somewhat interested in using just one company for their financial needs.

But people who carefully watch the investment industry say it will be harder and harder for firms like T. Rowe Price to continue rapid growth and to maintain strong mutual fund and portfolio performance when individuals and institutions can move their money among the growing list of financial instruments as fast as computer terminals transfer data.

"There are very few dummies in that industry and it's tougher and tougher to show up with high rankings up there with the large funds in general," said A. Michael Lipper, president of Lipper Analytical Distributors Inc., a leading chronicler of mutual funds.

"But I don't see any pressure for them to do anything soon," Lipper added, noting that many insurance companies, and even banks, brokers and industrial concerns are eager to take over companies like T. Rowe Price with established franchises. "There is precious little, if any evidence as to the soundness of the financial department store concept," Lipper said.

According to Lipper's calculations, the last year has not been spectacular for the five Price stock funds, despite the powerful performance of the stock market. The firm's $1.1 billion Growth Stock Fund, for instance, provided a return of just 17.4 percent during the first half of 1983, the poorest showing of any of the 17 similar funds with assets of over $500 million, Lipper reported.

Surprisingly, that 32-year-old fund's "growth stock" portfolio is not made up only of young, up-and-coming companies. Among its largest holdings are such giants as International Business Machines, American Express, Hewlett Packard, and McDonald's. Its 17.4 percent gain for the period compares with a 20 percent gain in the same period for the Dow Jones Industrial Average, the most closely watched measure of similar large companies.

On the other hand, the company's strong mutual fund reputation is in large part due to its $1.67 billion New Horizons Fund. The largest growth fund of its kind, New Horizon's portfolio grew by a third during the first half of the year. That performance ranks it eighth among funds of its kind in the nation, with a growth rate double the median growth rate for all mutual funds.

During the year ended June 30, New Horizons showed a 98 percent return, taking optimum advantage of the dramatic bull market. Investors have flocked to the fund, enabling it to grow from $1.37 billion in assets on March 30 to its current $1.67 billion, a $300 million expansion, while the Growth Stock fund drew only about $40 million in new money during the same period.

The firm was founded 40 years ago by Baltimore financier T. Rowe Price, who sold his interest when he retired and now has no connection with the company that bears his name.

The firm is now headed by President and Chief Executive Officer Curran Harvey and a six-member management committee, and draws most of its business through advertising and word-of-mouth rather than soliciting door-to-door as do some of its competitors. Prospectuses for the firm's funds can be ordered by telephone or by writing to the company.

Company executives said Price had record earnings in 1982, but the privately held company refuses to disclose actual earnings.

Price officers say the firm's equity funds are winding up as unexpected beneficiaries of the sagging fortunes of the company's money market funds. They assert that about half of the $800 million drop in the Price money fund stayed in the company and simply moved to another of the firm's investment pools.

"I would see very little chance that our money market fund or any other would regain what it lost," said Edward A. Taber, president of the firm's Prime Reserve Fund or money fund. Says Taber, the money fund's "day in the sun has passed."

The executives who manage these diverse funds are also quick to defend their records, noting that each has different investment objectives, with the Growth Stock fund geared to the long-term growth of established equities, while the New Horizons group looks to smaller, growing concerns for its return.

The goals of the funds and their holdings become muddy as the companies grow. For instance, Toys R Us, one of Wall Street's hottest concerns in recent years, is still one of the major holdings of what is supposed to be T. Rowe Price's small-company fund. The New Jersey-based toy-store chain ranks 43rd as the most widely held company by the mutual funds.

Because the stock and money fund businesses are so topsy-turvy, T. Rowe Price has taken a number of steps to broaden its operations. Its fixed-income mutual funds have grown dramatically since they were first offered eight years ago, surging from $114 million in assets in 1975 to $2.01 billion in 1980 and then to $5.1 billion at the end of the first quarter this year. And the Tax Free Income Fund has ballooned from about $673 million at the end of 1982 to about $955 million.

Today, Price's bond division has grown to an $8 billion business, and that shift away from stocks has helped profits. "In the early '70s, earnings were totally dependent on equities and that's not the most stable thing in the world," said George J. Collins, director of the firm's fixed-income division.

Its investment counsel business is also growing sharply too, repesenting about half the firm's $16 billion in assets under management, a balance with which Price officials seem satisfied.

T. Rowe Price is also becoming an increasingly important force in international financial markets, managing an international pool of more than $500 million in a joint venture with Britain's Robert Fleming Holdings Ltd. Company officials say the venture is second only to Morgan Bank in the size of its international portfolio and predict it will grow to about 10 percent of the firm's assets within the next five years.

From time to time, the company's executive team considers taking the firm public, although that is an unlikely short-term prospect. Going public would be a radical change for an employe-owned firm that, 200 miles from the hubbub of Wall Street, has created an atmosphere characterized by an aggressive entrepreneurial drive and internal competition.

The stock is diffusely held and there are no dominant employe shareholders. But many fear the tenor of the company would likely be lost if management either sold the firm or was forced to worry about quarter-by-quarter profitability because of pressure from stockholders.

Yet investment firms are hot buy-out targets these days and offers clearly are tempting. Experts predict T. Rowe Price would pull at least $100 million in the acquisition market and company officials view such bids as tantalizing at the very least. "The prices are high and the risk is that they might want to take advantage of a window and a price that might not be achievable again," said Lipper.

Being situated in Baltimore was once a drawback in recruiting and retaining talent, but the location is increasingly viewed as an asset because of the city's new-found appeal, its accessibility and the region's housing costs. When the firm moved into its present headquarters, Baltimore's Inner Harbor development was just beginning. Now T. Rowe Price people can walk across the street to Harbor Place or stroll a couple of blocks to the National Aquarium or Science Center.

This is crucial since investment firms survive on their ability to attract talent. "Your assets are your people," said George A. Roche, a company vice president.

Company executives say that once potential employes visit the firm they seem enamored of the city and once on board are often reluctant to pick up stakes. Unlike New York, "You can't just walk across the street and get another job," said Edward J. Mathias, president of the New Horizons Fund.