Shimming is an appropriate method of altering the action. It is unadvisable to put it between the heel and the tension band. It should sit between the top of the heel above the lag bolt and the rim. I do a lot of banjo repairs etc here and use thin wood veneer for shims. Sometimes I need to glue two or more pieces together then trim them to size so they are hidden by the heel shape.

Wayne’s right. I’ve had a shim there on my player for probably 56 years now. No problems. It’s stable and still doing what it’s supposed to.

banjonz I completely believe you. Could you explain further why it's unadvisable to put the shim between the heel and tension band?

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Originally posted by tomd7

I can certainly take the neck off and put a shim around the top lag bolt where it connects to the tone ring if needed. . . . I'm curious as to whether moving the shim down to the lag bolt really necessary.

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If you are going to shim to lower action, the upper lag area is the correct place for the shim. 

I have shimmed necks in both locations to raise or lower action. It's not without issues. While it avoids distorting the rim as happens when using the co-rods to adjust action, I believe it distorts the lag bolts. They get pulled/bent into a new alignment. But I think they'll survive.

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Originally posted by tomd7

banjonz I completely believe you. Could you explain further why it's unadvisable to put the shim between the heel and tension band?

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There should be a gap between the end of the neck and the tension hoop. The hoop needs to be free to move up and down to play its part in adjusting head tension.

I believe the tension hoop is isolated from the pot and does not play a role in the transfer of vibrations that creates a banjo's sound. If transfer of vibrations throughout the instrument is even what's happening. So doing something that not only eliminates the gap but increases the pressure of the neck on the tension hoop strikes me as bad for the sound. It's also bad for freedom of the tension hoop, as I just said.

It's also bad for the overall structure of the banjo, I think. The neck needs to make solid contact with the pot at the two lag bolt locations. Shimming at the tension hoop changes the geometry in a way that weakens the connection at the upper lag. (I believe)

Here's Warren Yates describing why there should be a gap between the neck and tension hoop.

Roger Siminoff is perhaps the best known person I can think of who advocates for the neck touching the tension hoop. He knows more than I do, but I still disagree. I choose to believe Warren.

There are two ways I see that this would hurt the tone. The first has been mentioned, which is that it creates a lot of pressure on the tension hoop.

The other, much bigger factor here is that it prevents the heel from contacting the skirt of the tone ring. A lot of the tone of a well setup-up banjo comes from vibration between the neck, tone ring, and rim. In my experience, without this contact the tone ring vibrates unnecessarily long and with too many high overtones. In addition, the banjo is less loud and doesn't play with as much authority in the core of each note.

You'd be better off using a shim at the heel contact and then a lower bridge to further bring down the action, imo.