A soft photoluminescent composite, prepared using a nematic liquid crystal and a fluorescent gelator, exhibits a nearly two orders of magnitude increase in fluorescence on addition of superparamagnetic nanoparticles. The internal magnetic field generated leading to an increase in the population of singlet excitons which affects the radiative efficiency, and enhanced ordering of the LC environment are proposed to be responsible for the large increase seen in fluorescence. Also, the nematic nature of the host liquid crystal medium aids in switching of the fluorescence intensity between its anisotropic limits on application of an external electric field with the switch-off time being faster compared to the field-driven switch-on time.